[avmich]

The idea is that people will cut spending somewhat to have more money stored in saving accounts where they produce more low-risk return. Cutting spending will dampen prices.

Increasing interest rates increases the temptation to lend money instead of spending.

[apropos_g]

> is that people will cut spending somewhat

Why would people cut spending on food and gas? They need both to survive. That's what the CPI is made of.

[avmich]

Because people will cut spending on going to theaters somewhat, and that takes some gas to get there. No, short term people don't need theaters to survive.

There is some non-critical spending to cut, Feds rely on that.