Interest rate holes in the hull

Can higher interest rates cause higher inflation? Paradoxically, yes.

“Man using a drill to create a hole in the bottom of his boat” created by OpenAI DALL•E 2

Economic lore tells us that the remedy for high inflation is to push up interest rates. Higher rates, economists say, limit lending and pull prices down. But the relationship is more complex than that. Higher rates can create inflation if there’s much debt. Workers …