system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: How does raising interest rates slow/lower inflation?
gpt
Here's the easy part of the equation:

* Loans create new money from thin air
* Money buys goods and services

Here's the hard part:

* Goods and services buy money.
* Nothing creates new goods and services from thin air.

Because #Covid and #SupplyChainDisruption, the global economy is not creating enough goods and services to buy all the money it created.

* To most of us, it looks like prices are going up quickly, which makes us anxious. 
* To economists, it looks like each good and service is forced to buy too much money—which makes them anxious.

High interest rates make loans expensive. 

Expensive loans are not as popular as cheap loans so fewer people take them.

An economy with fewer loans taken creates less money from thin air.

This gives us time to balance the pile of goods and services against the pile of money.