Inflation and Interest rate
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Inflation and Interest rate
https://edition.cnn.com/2019/07/11/investing/inflation-cpi-federal-reserve-rate-cut/index.html
In the coming months, the Fed will be forced to change its perception of inflation as well as the interest rates after an initial report concerning consumer prices were higher than expected. There is a possibility that the globe may face weak inflation more persistently than it already does today. The interest rates are expected to be reduced, and therefore, more people will be in a position to borrow money (La Monica, 2019). Thus, consumers will have more money at their disposal to spend, and the economy will grow. The subsequent result is that inflation will increase, and this typically explains the relationship between inflation and interest rates. When the interest rates go up, fewer people will borrow money (La Monica, 2019). Consumers will, therefore, have less money to spend, and the economy will go down. Inflation will go down as well. However, Fed often cuts the interest rates whenever the economy becomes weak, and inflation is not a problem.
Reference
La Monica, P., R. (2019). Inflation may be creeping higher after all. CNN Business.