Why Do Inflation and Interest Rates Have Such a Love-Hate Relationship?

Inflation is when things cost more over time. Interest rates are like the price you pay to borrow money. When inflation goes up, interest rates often go up too, it’s like a game of tag! If you're borrowing money and prices are rising, lenders want more money back because their money isn’t as valuable anymore.

Imagine you have a piggy bank. If the candy in the store costs more than before, you need to save more to buy it. That’s how inflation feels, like your money is shrinking. Interest rates are like the rules of that game.