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Interest rates

Interest rates refers to the current market yield on fixed income investments usually as referenced to the rates of Treasury bills or bonds in the yield curve.

Expanded Definition

Money is a commodity. Interest rates can be viewed as the cost to borrow money. Interest rates rise and fall with market demand. They are also influenced by the Federal Reserve Board which uses interest rates to stimulate the economy or slow inflation. Inflation also causes lenders to demand higher rates to loan money.

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