Is Wall Street holding the economy hostage?

Interest rates increasing decreases overall spending, which slows the economy. Therefore businesses become less profitable, and so stock is not worth as much bc the businesses are reporting decreased profits

A threat of increased interest threatens the above, so people sell stock more than they buy, causing increased supply and decreased demand, effectively diminishing the overall market value

The higher cost of capital could be passed on to the consumer, yes, but only as a reaction, and things like that take time. There would be an initial loss of profits for sure, which would result in the scenario I said before. And I dont know that the cost WOULD be passed to the consumer because the whole point is that the consumers stopped spending as much due to increased costs in other areas (interest), so they probably would spend even less if prices increased across the board, at least from my understanding and common sense

Also an increase in interest rates will make an increase in demand for U.S. Treasuries for foreign nations as well, mostly since the rest of the world's sovereign debt is at a lower rate than we are.

So therefore it will create an even stronger U.S. Dollar and will also weaken profits.

Increased interest rates chase money from stock market to fixed income market.

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So therefore it will create an even stronger U.S. Dollar and will also weaken profits.

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Only if they sell internationally FWIW

Ones that import the raw materials and sell domestically make a killing.