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# Raising rates causes inflation
- URL: https://larrysalibra.com/raising-rates-causes-inflation/
- Published: 2026-09-28T15:59:00.000Z
- Updated: 2026-09-28T17:30:48.000Z
- Author: Larry Salibra
- Tags: economics, day-81, daily

In a [recent interview](https://www.youtube.com/watch?v=9dUte6c7ZcM&ref=larrysalibra.com), macro analyst [Luke Gromen](https://x.com/lukegromen/?ref=larrysalibra.com) brought up his "most heretical" view which is that in current US financial environment raising interest rates is inflationary just like cutting interest rates traditional is thought of as inflationary. 

This is because of the size of the US debt ($40 trillion) and the fact that much of it is held by Americans and specifically baby boomers. By increasing interest rates, the holders of this debt get more money and some of them will spend the extra money. An increase in interest rates is stimulative in the same way that increasing Social Security payments would be stimulative.