How do rising interest rates affect the business cycle?

Rising interest rates typically lead to increased borrowing costs for businesses and consumers, which can dampen spending and investment. As companies face higher expenses for loans, they may cut back on expansion and hiring, potentially slowing down economic growth. Additionally, consumers may reduce their expenditures due to higher costs of financing. Overall, these factors can contribute to a slowdown in the business cycle, possibly leading to a recession if rates remain elevated for an extended period.