I would only make insert how raising interest rates pulls money out of circulation by making it more expensive to borrow. This slows down the fractional reserve lending money press, since it is by lending money they don't have that banks create money from thin air. And as you correctly point out, it is that increase in the money supply that is inflationary.
I would only make insert how raising interest rates pulls money out of circulation by making it more expensive to borrow. This slows down the fractional reserve lending money press, since it is by lending money they don't have that banks create money from thin air. And as you correctly point out, it is that increase in the money supply that is inflationary.