The expectation is that interest rates will be increased to reduce inflation however this increase will also be expected to cause a recession. The hope would be

The expectation is that interest rates will be increased to reduce inflation however this increase will also be expected to cause a recession. The hope would be that this recession would be smaller than the later recession that might be expected later from the high inflation. The theory was the same in the ’70s between Carter and Reagan. This time around, some think that raising rates won’t work in the same way to curb inflation due to differing theories about its cause. Needless to say, these things are hard to predict.