What is the most common way to cool off an economy?
"Contractionary Monetary Policy
Contractionary monetary policy is now a more popular method of controlling inflation. The goal of a contractionary policy is to reduce the money supply within an economy by increasing interest rates. This helps slow economic growth by making credit more expensive, which reduces consumer and business spending...
Monetary or Fiscal Policy Time Lag
Monetary policy changes normally take a certain amount of time to have an effect on the economy. The time lag could span anywhere from nine months up to two years.
... the lowest interest rate any reasonable lender should accept 5.25% to 5.5%The target federal funds rate. This rate was set by the FOMC at its July 2023 meeting, which was an increase of 25 basis points (0.25%) from the rate set in May 2023. At subsequent meetings, the rate has been kept the same and was confirmed at the last FOMC meeting on Jan. 31, 2024."
