This month I want to take some time to discuss interest rates in an economy and their link to Economic output and, perhaps more importantly these days, inflation.

Let’s start with a few statements I came across on different outlets, things you may have heard yourself or thought they were right (spoilers: they are wrong): (1) Banks are increasing their interest rates to increase their profits after the pandemic lock-downs; (2) Banks agreed to work together and squeeze more out of their clients; (3) The government is helping banks by increasing interest rates for nefarious reasons (bribes, lobbying, etc.).