However, the Federal Funds Rate determines how much banks charge each other when they lend reserves overnight. So, changes (and expected changes) to Fed interest rates, and the resulting impact on the prime rate and Treasury yields, influence how much shoppers and businesses pay in interest and have left over to spend.

The market rally stalled a bit off the back of hotter-than-expected inflation data. But investors aren't panicking. Why it matters: Investors see the price pressures as proof that consumers can handle more — and that companies can cash in.