Inflation and interest rates are two different economic concepts. Inflation refers to the rate at which the general level of prices for goods and services is rising, while interest rates refer to the cost of borrowing money or the return on investment. Inflation is measured by the Consumer Price Index (CPI), which tracks the prices of a basket of goods and services over time. Interest rates are set by central banks and reflect the cost of borrowing money or the return on investment. When inflation is high, interest rates tend to be high as well, as lenders demand higher returns to compensate for the loss of purchasing power caused by inflation. Conversely, when inflation is low, interest rates tend to be low as well, as lenders do not need to demand as high a return to compensate for the loss of purchasing power.
