federal funds rate should be more than the calculated inflation rate. So, both interest rates and the calculated inflation should be 'manipulated' at the same time. So far, we know the federal reserve sets/manipulates the interest rate, but there is a hidden incentive to set/manipulate the inflation rate, as both of them needs to be in sync. Since the USD is the world reserve currency, interest rates in every other countries are based on the federal reserve interest rate. So, there is an incentive to keep the interest rates low in the states, hence the appearance of, or the desire to set, low inflation. Just sanctions regime, military power, NATO are not enough to keep the USD as the reserve currency; low interest rate (low inflation in the states) is also necessary besides sanctions, army, NATO, etc.
raincom|2 years ago