The Bizarre Theory That Says Fed Increases Will Fuel Inflation

Updated on
  • `Neo-Fisherians' reevaluate link between rates and price gains
  • Persistently low inflation raises questions on economic theory

Could a Fed Rate Increase Actually Spur Inflation?

Many economists are so perplexed by the lack of inflation in the U.S. after years of unprecedented monetary stimulus that a bizarre, century-old theory is suddenly gaining traction: Maybe higher interest rates are what’s needed to push up consumer prices.

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