If inflation is running from 8.5-9.6%annually, and the US central bank (federal reserve) has raised the benchmark interest rate (fed fund rate) by .75% twice, and told investors that it'll keep raising its Fed fund rate until it sees clear signs of inflation coming down, how would a rise in inflation and interest rates affect the firm's value drivers and stock price?

Answer rating: 100% (QA)

ANSWER When interest rates rise stocks tend to fall in value because of lower future earnings Higher ... View the full answer