Will such a rate hike increase or decrease the money supply

Reference no: EM133366868

Question: In June 2022, the Federal Reserved imposed its first 0.75% interest rate hike -- the largest increase since 1994. Starting in January 2023, they dropped back to lower rate increases, but the rate increases continued with no indication of an end date.

The Fed reasoned that the rate hikes would help combat inflation. Has it worked? Will such a rate hike increase or decrease the money supply? How will that in turn affect inflation? How does that system work?

Reference no: EM133366868

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