Banks Watch This Every Day—You Should Too
Let me start with this: I’m a foster kid turned accidental banker, now leading a nearly $3 billion financial institution. I didn’t come from wealth or a family that talked about interest rates at the dinner table. I came from struggle—and learned the hard way how money moves, who it moves for, and how systems can either include or exclude.
That’s why I’m writing this.
Most people don’t wake up thinking about interest rates, bond yields, or the Federal Reserve. But those numbers quietly shape our financial lives.
They determine whether your mortgage remains affordable. Whether your business can grow—or needs to pause. Whether your credit card debt is manageable or overwhelming. Whether your retirement savings are working for you or against you.
This isn’t just Wall Street talk. It’s everyday reality for anyone who wants to build wealth, security, and opportunity. And it comes down to understanding one thing: how interest rates move—and what that means for you.
The Three Financial Risks You Should Know
In banking, I think every day about three types of risk. These same risks affect your household and business too:
- Credit Risk – Are you borrowing at a fair rate?
- Liquidity Risk – Do you have cash when life throws a curveball?
- Interest Rate Risk – How do rate changes impact your loans, savings, or investments?
When you understand these risks, you stop reacting—and start using the system to your advantage.
The Seesaw Effect of Interest Rates
Interest rates work like a seesaw. When new bonds offer higher rates, older ones lose value. When new bonds offer lower rates, older ones gain value.
This may seem abstract, but it plays out in your daily finances.
If you locked in a 4% mortgage and today’s rates are 6%, you’re in a good spot. If rates drop to 3%, you might consider refinancing. The same logic applies to credit cards, loans, and investments.
What You Can Do—Today
Here’s what smart positioning looks like:
If rates are rising…
- Lock in lower rates now.
- Pay down high-interest or variable-rate debt.
- Keep extra cash on hand; budgets can get tight.
If rates are falling…
- Explore refinancing debt.
- Consider shifting investments.
- Use lower borrowing costs to make strategic moves.
Stay Ahead of the Seesaw
If bond yields go up, loan rates rise—tough for borrowers, better for savers. If yields fall, borrowing gets cheaper—but savings grow slower.
Your financial future depends on more than hard work. It depends on understanding the levers that shape your options. Interest rates are one of the biggest.
So here’s your next step:
Check the rates on your mortgage, credit cards, and savings. Ask yourself: Am I making the most of today’s environment?
Because the people who understand the seesaw don’t get caught off guard. They stay ready—and rise with it.
Originally published in the Kansas City Business Journal’s Ask the Expert section in April of 2025 by Orv Kimbrough, Chairman and CEO at Midwest BankCentre