Rising inflation influences decision-making on interest rates
If consumers and firms expect higher inflation in the future, they may act preemptively—workers may demand higher wages, and businesses may increase prices.
This can lead to a self-fulfilling cycle of rising prices.
Rising inflation influences decision-making on interest rates
If consumers and firms expect higher inflation in the future, they may act preemptively—workers may demand higher wages, and businesses may increase prices.
This can lead to a self-fulfilling cycle of rising prices.