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  1. Home
  2. /Glossary
  3. /Interest Rates
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macro

Interest Rates

The cost of borrowing money, set by central banks and market forces.

Definition

The cost of borrowing money, set by central banks and market forces. When rates rise, borrowing gets expensive and risky assets tend to fall. Crypto thrived in the zero-rate era and struggled when rates climbed in 2022.

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Related Terms

Federal Reserve (Fed)

The central bank of the United States that sets monetary policy.

Monetary Policy

How central banks manage money supply and interest rates to influence the economy.

Bonds

Debt securities where you lend money to a government or corporation in exchange for regular interest payments and your principal back at maturity.

Basis Point

One hundredth of a percentage point (0.

CBDC (Central Bank Digital Currency)

A digital form of a country's official currency issued and controlled by its central bank.

Consumer Price Index (CPI)

A measure of average price changes for a basket of consumer goods and services.

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