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FredPret04/03/20251 replyview on HN

True but that mechanism is indirect at best. Usually high interest rates discourages more borrowing and lowers spending that way.

But in this case the price increase is already due to the government putting its thumb on the scale. The best way to reduce the price is not via the Rube Goldberg interest rate mechanism to shrink spending and thus demand for the $60 shoe, but by removing the tariff and make it a $30 shoe immediately.


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roflyear04/03/2025

It is how it works in all scenarios, though. Higher rates usually cause people to spend a little less which is a reduction in demand.

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