why does low inflation equal to high interst rates

Answer 1

Low inflation typically leads to high interest rates because central banks aim to maintain price stability in the economy. When inflation is low, there is less pressure on central banks to hike interest rates in order to combat rising prices. This allows them to raise interest rates to prevent the economy from overheating and maintain economic stability. High interest rates also help to encourage saving and reduce spending, which can further help to control inflation.