WatchTheWindAndCharm
#BTC #Fed May Rate Forecast 🎉💡Inflation and Interest Rate have a closely interconnected relationship. Here’s how they influence each other:
How Interest Rate Affects Inflation
- *Increase Interest Rate*: When the central bank raises interest rates, the borrowing costs for commercial banks, businesses, and consumers increase. This leads to:
- Higher savings Intrerest Rate to encourage people to save more and consume less
- Reduce spending and economic growth
- A decrease in demand for goods and services leads to a reduction in Inflation
- *Lowering Interest Rate*: Conversely, lowe
View OriginalHow Interest Rate Affects Inflation
- *Increase Interest Rate*: When the central bank raises interest rates, the borrowing costs for commercial banks, businesses, and consumers increase. This leads to:
- Higher savings Intrerest Rate to encourage people to save more and consume less
- Reduce spending and economic growth
- A decrease in demand for goods and services leads to a reduction in Inflation
- *Lowering Interest Rate*: Conversely, lowe



