How come inflation goes up when the Feds raise interest rates?

Question

Sorry I meant the inflation goes up when feds lower rates

Answer 1

It doesn't. Inflation and interest rates move in opposite directions. The Feds raise the rates to reduce inflation.

Answer 2

If the money in the economy increases faster than GDP growth the extra will be used to bid up prices and cause inflation.
Most of time the fed actually sets an upper limit on the overnight interest rate by supplying the extra money needed so the supply and demand for loans match at or near the target rate. Higher rates increase the supply and decrease the demand for loans, so the less "money" they need to add to achieve the target. They always add a little extra so they err on the side of inflation because experienced has shown that deflation has a large negative impact on economic growth.

Answer 3

The Austrian school of economics believes that inflation results when central-banking authorities increase the money supply (Monetary inflation).

Inflation hurts people on fixed incomes (e.g. pensioners, students) by reducing their purchasing power. One major area of criticism focuses on the failure of the Federal Reserve System to stop inflation; this is seen as a failure of the Fed's legislatively mandated duty to maintain stable prices. These critics focus particularly on inflation's effects on wages, since workers are hurt if their wages do not keep up with inflation. They point out that wages, as adjusted for inflation, or real wages, have dropped in the past.

Ron Paul (Republican Presidential candidate) sees the creation of the Federal Reserve, and its ability to "print money out of thin air" without commodity backing, as responsible for eroding the value of money, observing that "a dollar today is worth 4 cents compared to a dollar in 1913 when the Federal Reserve got in."

Answer 4

the higher the interest rate the less money is in the economy. The less money in the economy the slower the inflation.