Many people argue that because central banks have kept interest nates low since the 2008 financial crisis, stock markets have risen quickly. Why would that be? The fall in interest rates has led to an increase in the value of stocks because low interest rates increase tax shields, since interest payments generally reduce tax obligations low interest rates are expected to rise eventually firms are then expected to increase their levels of cheaper debt, which increases the Enterprise Value each future cash flow, either dividends or capital gains, is discounted less inflation is expected to rise, increasing the discount factor affecting future dividends