Rising Interest Rates Squeeze Businesses and Households

Interest rates have risen sharply and are expected to stay high for a prolonged period, making borrowing more expensive for businesses, homebuyers, governments, and consumers.

Small businesses are being hit hard, with higher loan payments forcing some to cut staff, forgo expansions, and sell assets. Entrepreneurs are also finding it harder to get financing.

The housing market is slowing as high mortgage rates reduce affordability. This will eventually constrain construction of new homes and apartments.

Farmers face weaker incomes but higher equipment costs due to high interest rates, forcing tough choices on investments.

Higher interest costs are diverging fortunes, with cash-rich consumers able to earn good returns while lower-income households struggle with higher loan payments.