way I always heard it is to fight inflation they increase interest which is supposed to encourage people to save the money rather than spend it thus lowering inflationary pressures in addition to interest capturing dollars that become unavailable for purchasing.
ironic given the idea behind increased interest rates is to encourage saving.
Not really. It’s to give an incentive to keep using the currency. Without this a lot of people would short the US dollar
way I always heard it is to fight inflation they increase interest which is supposed to encourage people to save the money rather than spend it thus lowering inflationary pressures in addition to interest capturing dollars that become unavailable for purchasing.