It's been a wild year in the stock market. With inflation at its highest level in 40 years, the Federal Reserve is aggressively raising interest rates to bring it down. These actions have rippled through every market, from bonds to stocks to cryptocurrencies -- all of which are down on the year.

While higher rates raise borrowing costs, one area of the economy welcomes them: the financial sector. That's because many companies in the industry benefit by charging higher rates on loans to their customers. Big banks like Bank of America (NYSE: BAC) and JPMorgan Chase (NYSE: JPM) have increased interest income thanks to those higher interest rates. Here's what rising rates mean for the economy and seven financial companies making money hand over fist.

The Federal Reserve serves a key role in the economy and primarily influences monetary policy by adjusting interest rates. It sets the overnight lending rate between banks -- known as the federal funds rate. Changes in this lending rate have ripple effects across all interest rate products, including mortgage rates, U.S. Treasuries, and municipal bonds.

Continue reading

Source Fool.com