Short-term Interest Rates

Short-term interest rates are the costs banks and lenders charge for borrowing money for brief periods, typically less than a year. These rates influence how expensive it is for businesses and consumers to access funds quickly, affecting everyday loans, credit cards, and government borrowing. Central banks, like the Federal Reserve, often adjust short-term rates to help control inflation and economic growth. When rates are low, borrowing becomes cheaper, encouraging spending and investment; when high, borrowing is more costly, which can slow down economic activity. These rates fluctuate based on economic conditions and monetary policy decisions.