The increase in global interest rates is an economic phenomenon that can affect various aspects of people’s lives and businesses throughout the world. When central banks, such as the Federal Reserve in the US or the European Central Bank, raise interest rates to counter inflation, the impact can be far-reaching and profound. One of the most direct impacts of rising interest rates is higher borrowing costs. Individuals who rely on credit, such as mortgages or consumer loans, will feel the burden heavier. For example, more expensive mortgage loans can reduce household purchasing power, causing the property market to contract. On a wider scale, this could impact the construction industry and other related sectors. At the corporate level, an increase in interest rates can result in an increase in operational costs. Companies that depend on debt for expansion or day-to-day operations may have to postpone their investment plans. Furthermore, companies that have short-term debt with variable interest rates may face the risk of bankruptcy if they are unable to manage their debt effectively. Additionally, increases in global interest rates are often accompanied by a strengthening of the currency of the country raising the interest rate. An increase in the US dollar exchange rate, for example, can harm developing country exporters, as their products become more expensive on international markets. Consequently, this could trigger a trade deficit as well as slow down the economic growth of these countries. For investors, rising interest rates create a shift in portfolio allocation. Bonds became more attractive, triggering stock selling and a flight from equity markets. These moves could create volatility in the market, with fears of slower growth. Global investors may look for safer assets, such as government bonds, to protect their value. Inflation is also a major concern as interest rates rise. Although increasing interest rates aims to put a brake on inflation, this process does not always run smoothly. In some cases, companies may choose to pass on higher costs to consumers, which could lead to higher inflation even as interest rates rise. This dynamic creates challenges for central banks in balancing economic growth and controlling inflation. For sectors that are more sensitive to interest rates, such as automotive and housing, the impact can be felt more sharply. Car sales may slow due to rising installments, while the housing sector is likely to suffer more due to falling demand. This not only affects producers, but can also cause unemployment in related sectors. Not only does it affect developed countries, developing countries can also feel a significant impact from rising global interest rates. Many developing countries rely on foreign investment for their economic growth. As interest rates rise, investment flows may be disrupted, resulting in reduced growth and economic instability. Rising global interest rates, therefore, are not an issue to be taken lightly. Every decision taken by a central bank can have a ripple effect that reaches across the globe, affecting various aspects of economic life. Careful management and monitoring is required to minimize negative impacts on global markets.