How to understand interest rates in a 'real' way

Separate real from relative

The recent wave of interest rate hikes is the first time many people, investors and fund managers alike, have had to contend with this macroeconomic factor.

Even this week, the Federal Reserve is expected to announce another hike in its interest rate. This would be the fourth in less than a year and the first time since the start of the millennium the central bank has run multi-consecutive increases. The UK has also been raising rates successively, now at 0.75%, the highest it has been for over a decade. This widespread uptick in rates has largely been in response to rising global inflation. Traditionally, interest rates are a tool used to attempt to control rising prices, which have now been driven up by lingering supply and demand issues f...