system
Given the following post, respond as if you're commenting on Reddit:
human
What's the cause of the breakdown between interest rate changes and inflation? Is my understanding correct?

I'm curious if my understanding on this is even remotely correct:

By reducing interest rates banks and other institutions can borrow more money for the same ongoing cost. With an increase in money available they're able to buy more stuff which create scarcity which leads to increased prices as people try to outbid each other for these things which decreases the value of money i.e. inflation.

Corporations are using these lower cost loans to invest in their companies (good) or do things like buy back stocks (not so good, though I guess the people who sold their stock can reinvest elsewhere?).

However there must be some sort of break between lower cost loans making corporations flush with cash and them making middle class more flush with cash (middle class being the bulk of the population). More production should make essentials cheaper leaving more money on hand and increasing inflation. So my suspicion is that it's a combination of stagnated wage growth over the last few decades and that that wage growth is first needed to create inflation, and that those who do have cash/the ability to take out loans primarily use it to buy houses instead of investing in other things.

While house prices going up does lead to more being built, I suspect the economic growth here is smaller per dollar spent that in other industries as much of the money is swallowed up by illogical house price increases instead of new builds (illogical as in house prices go up faster than rent so the IRR is not very good). Most of that being driven by "mom and pop" investors investing in the only thing they "know": houses.

Is this anywhere near what actual economists think? If not can someone point me towards their reasoning?
gpt
No break.  Newton  f=ma does not say exclusively the force but rather the “the sum of all forces”.  Same goes in economics. Inflation caused by an increase in money is one force.  There are other forces at work too that are deflationary.  
Right now there is a fear of lack of money, so people have been saving more.