GOLD 0.51% $1,391.7 gold futures

Raising rate creates deflation, because people are encouraged to...

  1. 12,538 Posts.
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    Raising rate creates deflation, because people are encouraged to save more (higher bank deposit rates) & spend less. Whereas cutting rate creates inflation, because people are encouraged to spend rather than putting money in the bank. Japan has a negative rate, it encourages people to spend and fire up all engines.
 
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