Interest rates affect consumers, businesses, and investors by influencing the cost of credit and the returns on savings and investments. Higher interest rates can slow economic growth by increasing borrowing costs, while lower rates encourage spending and investment. Bond prices, stock valuations, and real estate markets are all impacted by interest rate movements. Central banks use interest rate adjustments as a tool to manage economic cycles and financial stability. Investors monitor interest rate trends to adjust portfolio allocations and hedge against interest rate risk.