There’s two kinds of inflation. Demand-driven inflation caused by people having too much purchasing power. And supply-driven inflation because of shortages or s

There’s two kinds of inflation. Demand-driven inflation caused by people having too much purchasing power. And supply-driven inflation because of shortages or supply chain. Changing interest rates does not fix supply chain problems. It actually makes them worse because it removes the financial headroom that companies involved in those supply chains have to invest in improvements. For example, there is a shortage of computer chips. Say that you are Intel or Texas Instruments. You want to invest in producing more chips. Does increasing interest rates and probable recession make the magnitude of that investment go up or down? The Fed is like a surgeon that has amputated the wrong leg. Not only is the patient missing a perfectly good leg, but the other leg still has gangrene.