Hay everyone.
I hope you are all well
I wanted to ask a question related to fundamental analysis.
.
Am I right in saying, if USA has an inflation rate of 5%, and its inflation target is 2%.
Then they would need to hike interest rates too get the inflation rate to its target of 2% target. Because hiking interest rates lowers the inflation rate as it reduces consumer spending as it costs more to borrow so spending will be less.
.
Would this be correct or am I getting things mixed up?
Have a great day everyone .
I hope you are all well
I wanted to ask a question related to fundamental analysis.
.
Am I right in saying, if USA has an inflation rate of 5%, and its inflation target is 2%.
Then they would need to hike interest rates too get the inflation rate to its target of 2% target. Because hiking interest rates lowers the inflation rate as it reduces consumer spending as it costs more to borrow so spending will be less.
.
Would this be correct or am I getting things mixed up?
Have a great day everyone .