[crystalmeph]

The Federal Reserve, the central bank of the United States, has been raising interest rates very aggressively for the past year and a half to fight inflation. This has ended a very long-lived policy of near-zero interest rates which has been in place since 2009, the Great Financial Crisis.

When you borrow money from the bank, i.e. to fund the operations of a money-losing site like Reddit, ultimately the interest rate you pay on that loan is affected by the interest rates set by the Federal Reserve.

While interest rates were near zero, investors in money-losing companies like Reddit could justify just borrowing more money to keep the companies going, as the money was cheap.

But now with higher interest rates, the investors in Reddit, and other money-losing ventures, can no longer afford to just borrow more money to make up for the money they lost last year, they actually have to show a return or at least cut the losses to a level that the investor will tolerate. That means monetizing everything they can.

[Exuma]

So this is more along the lines of what I was thinking, where borrowed money had higher interest, but many other replies in this thread make it seem like because treasury bills are better people are just investing in that instead.

Is it both of these factors combined? Is it more one factor than the other?

[iaw]

Based on your comment I think you may be missing one aspect:

The money you get lent at the bank is the money people are investing.

Both of the things you describe in this comment are two halves of a market. There's someone borrowing money and someone lending money. The borrowing becomes more expensive because the lender has better alternatives.

[Exuma]

Ahhh, do you know what's funny is after I wrote that comment I went to the bathroom and while peeing I basically had the intuition they were 2 halves of the same thing, but I couldn't even articulate it. I was going to come back and try to ask again and I saw this comment. Thanks!

All this stuff I've tried to learn a few times and it's just so open ended, my mind is very more technically oriented and vague hand-waving statements on investopedia drives me crazy. Other people seem to understand it so easily but after the multiple attempts that I have made, I just have given up.

[iaw]

Read "A Random Walk Down Wall Street" by Burton Malkiel

It's the best non-biased primer I've found on finance.

[Exuma]

Thanks! I just ordered it.