INTEREST RATE AND INFLATION AND DEMAND

Interest rate rises decrease demand, which reduces inflation by austerity for those who can afford it least, and makes profit for the banks which benefit from the interest rate hikes.

The real picture is supply, which means increased supply decreases inflation, and price increases by suppliers, which increases inflation. Price controls on essential goods are the solution to increased inflation caused by restricted supply and price increases by suppliers.

Suppliers restricting supply, raising prices, are the principle drivers of inflation, raising interest rates decreases demand, which eventually lowers inflation by the decreased demand.

Price controls are politically difficult because suppliers and banks, the entitled rich, resist price controls on essential goods and services. Those with the least get the least because they have no influence in the political classes, which are influenced by the suppliers of essential goods and services, which they say causes stagflation, a lack of supply of essential goods and services.

6/22/23