Eli5: does high interest rates not just mean the bank will be making way more profit?

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If Interest rates just mean the bank are making more profit back doesn’t that mean they want them to be as high as possible? What incentivises them to reduce rates and make less money?

In: Economics

10 Answers

Anonymous 0 Comments

Banks are basically like those drug dealers in 1980s anti-drug commercials handing out free samples.

They get new customers when rates are lower, then screw the rates up and slowly bleed people on variable rates.

So think of those low rate periods as, “hey kid, you wanna try some *compounded interest*?”

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