This kicked the United States into a recession by driving down both the demand and supply of loans, the effect of which was to reverse the direction of inflation and interest rates (and led to the election of Ronald Reagan). Just as significantly, for financial companies at least, is the fact that falling interest rates translate into higher bond prices. In its latest 10-Q, Citigroup estimates that an increase of 100 basis points in short-term rates will translate into a $3.9 billion drop in the value of its securities portfolio.