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To: NOW who wrote (95269)4/17/2001 2:19:46 PM
From: Ilaine  Respond to of 436258
 
Why do interest rates go up in general? The law of supply and demand. Probably a combination of less money to lend and tightening credit standards due to fear of default. Even though the money supply is growing the rate of growth has slowed.



To: NOW who wrote (95269)4/17/2001 3:03:18 PM
From: Ilaine  Read Replies (1) | Respond to of 436258
 
I was mistaken about the rate of money growth slowing - I was looking at M1 annual data - over the last quarter M1, M2 and M3 growth are accelerating.

If money supply is growing but interest rates are going up, the culprit may be inflation.

Is increasing the money supply in an inflationary environment likely to reduce interest rates?