[Iv]

It removes it from the demand side of the economy, which, in period of low interests, is the part you want to boost.

[makomk]

The demand side of the economy doesn't seem to be the problem right now. There's enough demand that there's shortages and price increases for almost everything at this point.

[Iv]

The shortages seem to be caused by hiccups in the cupply-chains bottlenecks that have a hard time to adjust to the slowdown and recovery of the economy. It is not caused by a unusually high demand, but compared to its depressed self six month ago, it is comparatively high.

Interest rates are still very low. There is still a strong case to argue that the demand is lagging.

[a3n]

But isn't that "removed" money being lent out by the bank?

[Iv]

Yes, typically as investment, that feed the supply side.

[a3n]

Which pays their workers and suppliers, and the money circulates.

[Iv]

No, investments typically feed growth, not normal operations, which are funded by clients, ergo the demand-side.