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Originally Posted by DementedReality
i would love an explanation on why we want interest rates to climb. i am interested in the positive economic impacts this would have.
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When interest rates rise, people generally spend less and borrow less to acquire consumer goods. Their money often gets committed to things like paying higher rates for their mortgages, etc. This helps to stem inflation due to lower market demand and a slow down of cost of living increases. This creates lower demand for increased wages by workers.