> in order to truly combat inflation (not just the CPI) the cost of borrowing needs to be higher than the actual inflation rate itself. So, if inflation is 10%

> in order to truly combat inflation (not just the CPI) the cost of borrowing needs to be higher than the actual inflation rate itself. So, if inflation is 10% right now, interest rates need to be above 10% to create a real negative pressure on the inflation rate itself. Yes, but it’s not the interest rate today that needs to be higher than today’s inflation rate, it’s the expected interest that needs be higher than the expected inflation over the typical loan period. As interest rates increase the inflation rate will come down and the two will cross somewhere in the middle.