[simple-thoughts]

Note that higher interest rates necessitates higher corporate profits. If corporate profits didn’t rise with interest rates, then the risk adjusted return on equity would drop relative to the risk free rate. Imagine you’re considering stocks versus bonds at 5% versus 0% on bonds- given the risks stocks hold, bonds look relatively more attractive. The other side of higher equity costs is less funding for business investment - fewer loss leaders, fewer vc funded firms running quarterly losses, and so forth.