"As buying a house or a car or expanding a business becomes pricier, people pull back from doing those things. With fewer consumers and companies competing for the available supply of goods and services, price gains are able to moderate."
"Banks pass on the cost of a higher federal funds rate to their customers when those customers want to access regular lending products...As the theory goes, if it's more expensive to borrow money or carry a balance on a credit card, consumers will spend less. When spending declines, demand will fall and, eventually, so will the price of everyday goods."
"The philosophy is that if goods and services become too pricey, less people will buy them, and sellers will have to lower their prices to retain customers."
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