Quote:
Originally Posted by opendoor
But if people are buying that car on credit, rising interest rates will mean fewer people will be able to afford that car at $34K which will tend to depress the price as it will bring demand more in line with supply.
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Right, that is why they raise interest rates to combat inflation. But inflation expectations are a powerful force that increases future inflation - so if they become intrenched interest rates will need to rise much higher than otherwise.