Interest rate hikes refer to the increase in the cost of borrowing money, typically set by a country's central bank, such as the Federal Reserve in the United States. When interest rates rise, loans become more expensive, which can slow down consumer spending and business investments. This is often done to control inflation, which is the rate at which prices for goods and services increase. Higher interest rates can also affect savings, as they may lead to better returns on savings accounts and fixed-income investments. However, they can also make it harder for individuals and businesses to take out loans, potentially slowing economic growth. Central banks carefully consider these factors when deciding to implement interest rate hikes.