[ALittleLight]

Imagine you could have $1 now or x 1 year from now. How big would x have to be in order for you to prefer it?

Well, if you were planning on buying a $1 savings bond at a 2% interest rate than x would have to be 1.02 or bigger. If the interest rate increased then x would need to increase as well. In other words, an increase in the interest rate is a decrease in the future value of money - it takes more future dollars to be worth the same amount of present dollars.

When interest rates are low, companies prefer earning money in the future. They prefer growth. When interest rates are high then companies shift their preference to present dollars. What we are seeing is companies choosing to pursue money now rather than money in the future because of what interest rates are doing.