Market interest rates

Available under Creative Commons-ShareAlike 4.0 International License.

There is a market for investments which ultimately includes the money market, bond market, stock market and currency market as well as retail financial institutions like banks.

Exactly how these markets function is a complex question. However, economists generally agree that the interest rates yielded by any investment take into account:

• The risk-free cost of capital
• Inflationary expectations
• The level of risk in the investment
• The costs of the transaction