facebookHow does the fed interest rates affect inflation? I have been hearing a lot about this recently but I'm not sure what to make of it.? - Seedly

Anonymous

24 Nov 2019

General Investing

How does the fed interest rates affect inflation? I have been hearing a lot about this recently but I'm not sure what to make of it.?

Discussion (3)

What are your thoughts?

Learn how to style your text

Kelly Trinh

24 Nov 2019

Backoffice technical at financial services firm

Interest rates affect the balance between saving (for future) and consumption (immeidately). Having higher interest rates makes saving more attractive all else equal and so there is less money chasing for goods and with the lowered demand then pressures on prices (inflation) will be less

Nicholes Wong

07 Jun 2019

Diploma in Business Management at Nanyang Polytechnic

It affects both loans and savings accounts interest rate just in case you dont know about it. When interest rates goes up, inflation will go down. This is because when interest rate is low, people can borrow more money to spend, it is also not good to save money since interest will be low for savings account and more money will go around allowing economy to grow which result in higher inflation. Vice versa if interest rate is high, people will less likely to borrow money and save money instead. So less money go around and economy slow down which result in lower inflation.

View 1 replies

Write your thoughts