How do rising interest rates typically affect consumers' purchasing decisions?

Rising interest rates often lead consumers to prioritize saving over spending. When interest rates increase, the cost of borrowing goes up, making loans and credit more expensive. This discourages consumers from taking on debt for large purchases, as the higher interest payments can significantly impact their overall financial commitments. Additionally, consumers may shift their focus towards saving to take advantage of higher interest rates on savings accounts, which can yield better returns. As a result, the inclination to save rather than spend becomes more pronounced, as individuals seek to secure their financial future in an uncertain economic climate. This behavior reflects a general trend of caution in consumer spending habits when faced with the prospect of rising borrowing costs.