Can inflation actually be fixed? Is there any hope? Or will prices just gradually keep increasing?
In: 45
Low interest rates incentivize borrowing and then spending. Easy access to money lead to higher spending and creates inflation. Governments are trying to accomplish the opposite by increasing interest rates. It’s more difficult to borrow and there’s an greater return on savings. If we’re incentivized to “hoard” money by saving, there’s less demand for goods. Inflation should come down as sellers to compete for our spending by lowering prices. Shit out there all still more expensive so time will tell if the plan works.
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