Why Do Interest Rates Change On Us So Suddenly?

Written By Michael Custer

If you've ever wondered "why do interest rates move and how does it impact me?” this episode is for you.

We gave Michael CFP®, EA a challenge: can he explain how and why interest rates change? This impacts everyday lives so we're interested to know. How come so quickly a mortgage rate goes up? Could it come back down?

We asked Michael to explain it so that a 10‑year‑old might get it! How do we think he did? It'd have to be a pretty smart 10-year old! But I think we're catching on.

In this episode we explore why interest rates move, why they can affect mortgages and car loans, and why the bond market pays very close attention every time the Fed clears its throat.

It is all the real world stuff that shapes buying a home, running a business, saving for retirement, and figuring out whether your cash may want to sit tight or get to work. And yes, we keep it friendly and curiosity driven so you can walk away feeling like this finally makes sense without needing a PhD in economics.

Topics:

💭 Why interest rates matter in everyday life

💭 What the Fed funds rate actually is

💭 A candy bar example

💭 Understanding risk and return in simple terms

💭 Why the US Treasury can play a pivotal role on your life

💭 How rising rates may affect mortgages and car loans

💭 How rate changes can impact the bond market

💭 Why businesses care about borrowing costs

💭 Inflation, unemployment, and the Fed’s balancing act

💭 What rising or falling rates may mean for savers

Michael Custer

Michael graduated from Hope College where he played Quarterback for the football team. Now, he focuses on tax strategies, helping W-2 employees and small business owners with implementing tax strategies, learning their choices with old work retirement plans, and Roth IRAs. He has a passion for building a relationship with his clients. Understanding why money matters to you is important to him. He firmly believes that finances can be a powerful tool for your life goals.

Michael is a CERTIFIED FINANCIAL PLANNER™ (CFP®) and also holds his Series 7, Series 66, Series 24. and SIE registrations with LPL Financial as well as his Life, Health, Property and Casualty insurance licenses.

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