Regrettably, there are a fair number of Americans who really don’t understand interest rates or the cost of money, but they really should. After all, what we collectively pay for in terms of our student loans, mortgages, credit cards, and various loans comes down to the cost of that money, and the higher that cost is, the greater it impacts our pocketbook. For a certainty, those who are debtors, strongly prefer that interest rates be low, because that signifies for them that the cost of that money is going to be lower, regardless of whether they mathematically understand the difference between a 20% interest rate or a 5% interest rate So then, it is true that those that are debtors are going to desire lower interest rates. In contrast, those who are savers, along with being conservative investors, are going to prefer interest rates to be higher, because higher interest rates signify to them that they can get a better rate of return on their CDs, savings accounts, and money market accounts.
Since this government of the United States has a massive federal deficit, and continues to be fiscally irresponsible regarding balancing its books, it is incumbent for America to strongly desire that the cost of borrowing money, be trending to being lower, because that means that the monies so being allocated to the payment of that debt, or at least making that debt to stay current is going to be easier to achieve. This would seem to strongly imply that this government would be a strong proponent of lower interest rates. So too, it follows that we find when interest rates are lower that this typically encourages the general population to spend more and to thereby save less, which is good for the economy, for the advantages of saving have effectively been reduced meaningfully.
That said, one of the notable problems with lower interest rates and thereby less savings is that we often get more dollars chasing after goods and services, which thus creates the drawback of higher inflation. Additionally, for those who prefer to passively save their money and to thereby invest that in CDs or similar, they are going to have to add to their risk, because the return on CDs is too low and will not therefore keep pace with inflation.
All of the above are indicative that interest rates most definitely matter, and that those who are savvy understand well that the best time to borrow or to add to one’s debt is when interest rates are low, and the best time to passively invest is when interest rates are high. This signifies that those that read the tea leaves best, are the same that are going to get a superior result, as opposed to all those that blithely go about their business without bothering to understand that ignoring the fundamentals of interest rates, will impact their financial well-being, and thereby not valuing correctly the money that they have in hand or that they owe, will be something that they will ultimately regret.