The Reserve Bank of India (RBI) hiked the repo rate after nearly four years on Wednesday, as India joined the global rate-tightening wave amid mounting inflationary pressures. In this context, investors remember why Warren Buffett felt interest rates are the “most important item” over time for determining stock valuations.
“The most important factor over time to determine stock valuations is obviously interest rates,” the legendary market investor told CNBC during an interview back in 2017. He explained that if interest rates are lower, it makes any stream of earnings from investments worth more money.
