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It removes it from the demand side of the economy, which, in period of low interests, is the part you want to boost.

• makomk 5y ago
  The demand side of the economy doesn't seem to be the problem right now. There's enough demand that there's shortages and price increases for almost everything at this point.
  • Iv 5y ago
    The shortages seem to be caused by hiccups in the cupply-chains bottlenecks that have a hard time to adjust to the slowdown and recovery of the economy. It is not caused by a unusually high demand, but compared to its depressed self six month ago, it is comparatively high. Interest rates are still very low. There is still a strong case to argue that the demand is lagging.
• a3n 5y ago
  But isn't that "removed" money being lent out by the bank?
  • Iv 5y ago
    Yes, typically as investment, that feed the supply side.
    • a3n 5y ago
      Which pays their workers and suppliers, and the money circulates.
      • Iv 5y ago
        No, investments typically feed growth, not normal operations, which are funded by clients, ergo the demand-side.