Economists don’t all agree on the way interest rates impact inflation but the belief is the higher rates will help lower inflation. UC Irvine economics [assistant] professor, Jack Liebersohn, explains why. “What most people think is that when interest rates go up then people will spend less and firms will also borrow less and make less investment. And that reduction in overall consumption and overall demand will put less pressure on the economy and inflation will fall,” says Liebersohn.

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