A World Dominated by Central Banks: The Complex Relationship Between Interest Rate Policy and the Financial Markets

Introduction: How Interest Rate Policy Moves the Markets

Central banks' interest rate policies play a critically important role in financial markets.
In particular, policy decisions by the U.S. Federal Reserve (FOMC) and the European Central Bank (ECB) have a substantial impact on stocks, currencies, and bond markets.
This article delves into the effects these interest rate policies have on markets and discusses how investors should respond.

Basics of Interest Rate Policy and Its Effects

Objectives of Interest Rate Policy