THREAD: The Federal Reserve injected a substantial amount of additional money into the money supply by making access to loans cheap. More loans = more money into the money supply.

This caused inflation to rise.

Let me explain how the fractional reserve banking process works. In the picture above, you can see the impact raising rates has for consumers, & has the same impact for large businesses.

Because rates are so high & interest costs become more expensive, less people will borrow money. This essentially removes money from the supply. Here’s why: