Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 73 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]Code Context
trigger_error($message, E_USER_DEPRECATED);
}
$message = 'The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 73 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php.' $stackFrame = (int) 1 $trace = [ (int) 0 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Http/ServerRequest.php', 'line' => (int) 2421, 'function' => 'deprecationWarning', 'args' => [ (int) 0 => 'The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead.' ] ], (int) 1 => [ 'file' => '/home/brlfuser/public_html/src/Controller/ArtileDetailController.php', 'line' => (int) 73, 'function' => 'offsetGet', 'class' => 'Cake\Http\ServerRequest', 'object' => object(Cake\Http\ServerRequest) {}, 'type' => '->', 'args' => [ (int) 0 => 'catslug' ] ], (int) 2 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Controller/Controller.php', 'line' => (int) 610, 'function' => 'printArticle', 'class' => 'App\Controller\ArtileDetailController', 'object' => object(App\Controller\ArtileDetailController) {}, 'type' => '->', 'args' => [] ], (int) 3 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Http/ActionDispatcher.php', 'line' => (int) 120, 'function' => 'invokeAction', 'class' => 'Cake\Controller\Controller', 'object' => object(App\Controller\ArtileDetailController) {}, 'type' => '->', 'args' => [] ], (int) 4 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Http/ActionDispatcher.php', 'line' => (int) 94, 'function' => '_invoke', 'class' => 'Cake\Http\ActionDispatcher', 'object' => object(Cake\Http\ActionDispatcher) {}, 'type' => '->', 'args' => [ (int) 0 => object(App\Controller\ArtileDetailController) {} ] ], (int) 5 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Http/BaseApplication.php', 'line' => (int) 235, 'function' => 'dispatch', 'class' => 'Cake\Http\ActionDispatcher', 'object' => object(Cake\Http\ActionDispatcher) {}, 'type' => '->', 'args' => [ (int) 0 => object(Cake\Http\ServerRequest) {}, (int) 1 => object(Cake\Http\Response) {} ] ], (int) 6 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Http/Runner.php', 'line' => (int) 65, 'function' => '__invoke', 'class' => 'Cake\Http\BaseApplication', 'object' => object(App\Application) {}, 'type' => '->', 'args' => [ (int) 0 => object(Cake\Http\ServerRequest) {}, (int) 1 => object(Cake\Http\Response) {}, (int) 2 => object(Cake\Http\Runner) {} ] ], (int) 7 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Routing/Middleware/RoutingMiddleware.php', 'line' => (int) 162, 'function' => '__invoke', 'class' => 'Cake\Http\Runner', 'object' => object(Cake\Http\Runner) {}, 'type' => '->', 'args' => [ (int) 0 => object(Cake\Http\ServerRequest) {}, (int) 1 => object(Cake\Http\Response) {} ] ], (int) 8 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Http/Runner.php', 'line' => (int) 65, 'function' => '__invoke', 'class' => 'Cake\Routing\Middleware\RoutingMiddleware', 'object' => object(Cake\Routing\Middleware\RoutingMiddleware) {}, 'type' => '->', 'args' => [ (int) 0 => object(Cake\Http\ServerRequest) {}, (int) 1 => object(Cake\Http\Response) {}, (int) 2 => object(Cake\Http\Runner) {} ] ], (int) 9 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Routing/Middleware/AssetMiddleware.php', 'line' => (int) 88, 'function' => '__invoke', 'class' => 'Cake\Http\Runner', 'object' => object(Cake\Http\Runner) {}, 'type' => '->', 'args' => [ (int) 0 => object(Cake\Http\ServerRequest) {}, (int) 1 => object(Cake\Http\Response) {} ] ], (int) 10 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Http/Runner.php', 'line' => (int) 65, 'function' => '__invoke', 'class' => 'Cake\Routing\Middleware\AssetMiddleware', 'object' => object(Cake\Routing\Middleware\AssetMiddleware) {}, 'type' => '->', 'args' => [ (int) 0 => object(Cake\Http\ServerRequest) {}, (int) 1 => object(Cake\Http\Response) {}, (int) 2 => object(Cake\Http\Runner) {} ] ], (int) 11 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Middleware/ErrorHandlerMiddleware.php', 'line' => (int) 96, 'function' => '__invoke', 'class' => 'Cake\Http\Runner', 'object' => object(Cake\Http\Runner) {}, 'type' => '->', 'args' => [ (int) 0 => object(Cake\Http\ServerRequest) {}, (int) 1 => object(Cake\Http\Response) {} ] ], (int) 12 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Http/Runner.php', 'line' => (int) 65, 'function' => '__invoke', 'class' => 'Cake\Error\Middleware\ErrorHandlerMiddleware', 'object' => object(Cake\Error\Middleware\ErrorHandlerMiddleware) {}, 'type' => '->', 'args' => [ (int) 0 => object(Cake\Http\ServerRequest) {}, (int) 1 => object(Cake\Http\Response) {}, (int) 2 => object(Cake\Http\Runner) {} ] ], (int) 13 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Http/Runner.php', 'line' => (int) 51, 'function' => '__invoke', 'class' => 'Cake\Http\Runner', 'object' => object(Cake\Http\Runner) {}, 'type' => '->', 'args' => [ (int) 0 => object(Cake\Http\ServerRequest) {}, (int) 1 => object(Cake\Http\Response) {} ] ], (int) 14 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Http/Server.php', 'line' => (int) 98, 'function' => 'run', 'class' => 'Cake\Http\Runner', 'object' => object(Cake\Http\Runner) {}, 'type' => '->', 'args' => [ (int) 0 => object(Cake\Http\MiddlewareQueue) {}, (int) 1 => object(Cake\Http\ServerRequest) {}, (int) 2 => object(Cake\Http\Response) {} ] ], (int) 15 => [ 'file' => '/home/brlfuser/public_html/webroot/index.php', 'line' => (int) 39, 'function' => 'run', 'class' => 'Cake\Http\Server', 'object' => object(Cake\Http\Server) {}, 'type' => '->', 'args' => [] ] ] $frame = [ 'file' => '/home/brlfuser/public_html/src/Controller/ArtileDetailController.php', 'line' => (int) 73, 'function' => 'offsetGet', 'class' => 'Cake\Http\ServerRequest', 'object' => object(Cake\Http\ServerRequest) { trustProxy => false [protected] params => [ [maximum depth reached] ] [protected] data => [[maximum depth reached]] [protected] query => [[maximum depth reached]] [protected] cookies => [ [maximum depth reached] ] [protected] _environment => [ [maximum depth reached] ] [protected] url => 'latest-news-updates/rationale-behind-raising-interest-rates-sashwath-swaminathan-nd-anand-srinivasan/print' [protected] base => '' [protected] webroot => '/' [protected] here => '/latest-news-updates/rationale-behind-raising-interest-rates-sashwath-swaminathan-nd-anand-srinivasan/print' [protected] trustedProxies => [[maximum depth reached]] [protected] _input => null [protected] _detectors => [ [maximum depth reached] ] [protected] _detectorCache => [ [maximum depth reached] ] [protected] stream => object(Zend\Diactoros\PhpInputStream) {} [protected] uri => object(Zend\Diactoros\Uri) {} [protected] session => object(Cake\Http\Session) {} [protected] attributes => [[maximum depth reached]] [protected] emulatedAttributes => [ [maximum depth reached] ] [protected] uploadedFiles => [[maximum depth reached]] [protected] protocol => null [protected] requestTarget => null [private] deprecatedProperties => [ [maximum depth reached] ] }, 'type' => '->', 'args' => [ (int) 0 => 'catslug' ] ]deprecationWarning - CORE/src/Core/functions.php, line 311 Cake\Http\ServerRequest::offsetGet() - CORE/src/Http/ServerRequest.php, line 2421 App\Controller\ArtileDetailController::printArticle() - APP/Controller/ArtileDetailController.php, line 73 Cake\Controller\Controller::invokeAction() - CORE/src/Controller/Controller.php, line 610 Cake\Http\ActionDispatcher::_invoke() - CORE/src/Http/ActionDispatcher.php, line 120 Cake\Http\ActionDispatcher::dispatch() - CORE/src/Http/ActionDispatcher.php, line 94 Cake\Http\BaseApplication::__invoke() - CORE/src/Http/BaseApplication.php, line 235 Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65 Cake\Routing\Middleware\RoutingMiddleware::__invoke() - CORE/src/Routing/Middleware/RoutingMiddleware.php, line 162 Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65 Cake\Routing\Middleware\AssetMiddleware::__invoke() - CORE/src/Routing/Middleware/AssetMiddleware.php, line 88 Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65 Cake\Error\Middleware\ErrorHandlerMiddleware::__invoke() - CORE/src/Error/Middleware/ErrorHandlerMiddleware.php, line 96 Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65 Cake\Http\Runner::run() - CORE/src/Http/Runner.php, line 51 Cake\Http\Server::run() - CORE/src/Http/Server.php, line 98
Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 74 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]Code Context
trigger_error($message, E_USER_DEPRECATED);
}
$message = 'The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 74 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php.' $stackFrame = (int) 1 $trace = [ (int) 0 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Http/ServerRequest.php', 'line' => (int) 2421, 'function' => 'deprecationWarning', 'args' => [ (int) 0 => 'The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead.' ] ], (int) 1 => [ 'file' => '/home/brlfuser/public_html/src/Controller/ArtileDetailController.php', 'line' => (int) 74, 'function' => 'offsetGet', 'class' => 'Cake\Http\ServerRequest', 'object' => object(Cake\Http\ServerRequest) {}, 'type' => '->', 'args' => [ (int) 0 => 'artileslug' ] ], (int) 2 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Controller/Controller.php', 'line' => (int) 610, 'function' => 'printArticle', 'class' => 'App\Controller\ArtileDetailController', 'object' => object(App\Controller\ArtileDetailController) {}, 'type' => '->', 'args' => [] ], (int) 3 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Http/ActionDispatcher.php', 'line' => (int) 120, 'function' => 'invokeAction', 'class' => 'Cake\Controller\Controller', 'object' => object(App\Controller\ArtileDetailController) {}, 'type' => '->', 'args' => [] ], (int) 4 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Http/ActionDispatcher.php', 'line' => (int) 94, 'function' => '_invoke', 'class' => 'Cake\Http\ActionDispatcher', 'object' => object(Cake\Http\ActionDispatcher) {}, 'type' => '->', 'args' => [ (int) 0 => object(App\Controller\ArtileDetailController) {} ] ], (int) 5 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Http/BaseApplication.php', 'line' => (int) 235, 'function' => 'dispatch', 'class' => 'Cake\Http\ActionDispatcher', 'object' => object(Cake\Http\ActionDispatcher) {}, 'type' => '->', 'args' => [ (int) 0 => object(Cake\Http\ServerRequest) {}, (int) 1 => object(Cake\Http\Response) {} ] ], (int) 6 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Http/Runner.php', 'line' => (int) 65, 'function' => '__invoke', 'class' => 'Cake\Http\BaseApplication', 'object' => object(App\Application) {}, 'type' => '->', 'args' => [ (int) 0 => object(Cake\Http\ServerRequest) {}, (int) 1 => object(Cake\Http\Response) {}, (int) 2 => object(Cake\Http\Runner) {} ] ], (int) 7 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Routing/Middleware/RoutingMiddleware.php', 'line' => (int) 162, 'function' => '__invoke', 'class' => 'Cake\Http\Runner', 'object' => object(Cake\Http\Runner) {}, 'type' => '->', 'args' => [ (int) 0 => object(Cake\Http\ServerRequest) {}, (int) 1 => object(Cake\Http\Response) {} ] ], (int) 8 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Http/Runner.php', 'line' => (int) 65, 'function' => '__invoke', 'class' => 'Cake\Routing\Middleware\RoutingMiddleware', 'object' => object(Cake\Routing\Middleware\RoutingMiddleware) {}, 'type' => '->', 'args' => [ (int) 0 => object(Cake\Http\ServerRequest) {}, (int) 1 => object(Cake\Http\Response) {}, (int) 2 => object(Cake\Http\Runner) {} ] ], (int) 9 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Routing/Middleware/AssetMiddleware.php', 'line' => (int) 88, 'function' => '__invoke', 'class' => 'Cake\Http\Runner', 'object' => object(Cake\Http\Runner) {}, 'type' => '->', 'args' => [ (int) 0 => object(Cake\Http\ServerRequest) {}, (int) 1 => object(Cake\Http\Response) {} ] ], (int) 10 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Http/Runner.php', 'line' => (int) 65, 'function' => '__invoke', 'class' => 'Cake\Routing\Middleware\AssetMiddleware', 'object' => object(Cake\Routing\Middleware\AssetMiddleware) {}, 'type' => '->', 'args' => [ (int) 0 => object(Cake\Http\ServerRequest) {}, (int) 1 => object(Cake\Http\Response) {}, (int) 2 => object(Cake\Http\Runner) {} ] ], (int) 11 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Middleware/ErrorHandlerMiddleware.php', 'line' => (int) 96, 'function' => '__invoke', 'class' => 'Cake\Http\Runner', 'object' => object(Cake\Http\Runner) {}, 'type' => '->', 'args' => [ (int) 0 => object(Cake\Http\ServerRequest) {}, (int) 1 => object(Cake\Http\Response) {} ] ], (int) 12 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Http/Runner.php', 'line' => (int) 65, 'function' => '__invoke', 'class' => 'Cake\Error\Middleware\ErrorHandlerMiddleware', 'object' => object(Cake\Error\Middleware\ErrorHandlerMiddleware) {}, 'type' => '->', 'args' => [ (int) 0 => object(Cake\Http\ServerRequest) {}, (int) 1 => object(Cake\Http\Response) {}, (int) 2 => object(Cake\Http\Runner) {} ] ], (int) 13 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Http/Runner.php', 'line' => (int) 51, 'function' => '__invoke', 'class' => 'Cake\Http\Runner', 'object' => object(Cake\Http\Runner) {}, 'type' => '->', 'args' => [ (int) 0 => object(Cake\Http\ServerRequest) {}, (int) 1 => object(Cake\Http\Response) {} ] ], (int) 14 => [ 'file' => '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Http/Server.php', 'line' => (int) 98, 'function' => 'run', 'class' => 'Cake\Http\Runner', 'object' => object(Cake\Http\Runner) {}, 'type' => '->', 'args' => [ (int) 0 => object(Cake\Http\MiddlewareQueue) {}, (int) 1 => object(Cake\Http\ServerRequest) {}, (int) 2 => object(Cake\Http\Response) {} ] ], (int) 15 => [ 'file' => '/home/brlfuser/public_html/webroot/index.php', 'line' => (int) 39, 'function' => 'run', 'class' => 'Cake\Http\Server', 'object' => object(Cake\Http\Server) {}, 'type' => '->', 'args' => [] ] ] $frame = [ 'file' => '/home/brlfuser/public_html/src/Controller/ArtileDetailController.php', 'line' => (int) 74, 'function' => 'offsetGet', 'class' => 'Cake\Http\ServerRequest', 'object' => object(Cake\Http\ServerRequest) { trustProxy => false [protected] params => [ [maximum depth reached] ] [protected] data => [[maximum depth reached]] [protected] query => [[maximum depth reached]] [protected] cookies => [ [maximum depth reached] ] [protected] _environment => [ [maximum depth reached] ] [protected] url => 'latest-news-updates/rationale-behind-raising-interest-rates-sashwath-swaminathan-nd-anand-srinivasan/print' [protected] base => '' [protected] webroot => '/' [protected] here => '/latest-news-updates/rationale-behind-raising-interest-rates-sashwath-swaminathan-nd-anand-srinivasan/print' [protected] trustedProxies => [[maximum depth reached]] [protected] _input => null [protected] _detectors => [ [maximum depth reached] ] [protected] _detectorCache => [ [maximum depth reached] ] [protected] stream => object(Zend\Diactoros\PhpInputStream) {} [protected] uri => object(Zend\Diactoros\Uri) {} [protected] session => object(Cake\Http\Session) {} [protected] attributes => [[maximum depth reached]] [protected] emulatedAttributes => [ [maximum depth reached] ] [protected] uploadedFiles => [[maximum depth reached]] [protected] protocol => null [protected] requestTarget => null [private] deprecatedProperties => [ [maximum depth reached] ] }, 'type' => '->', 'args' => [ (int) 0 => 'artileslug' ] ]deprecationWarning - CORE/src/Core/functions.php, line 311 Cake\Http\ServerRequest::offsetGet() - CORE/src/Http/ServerRequest.php, line 2421 App\Controller\ArtileDetailController::printArticle() - APP/Controller/ArtileDetailController.php, line 74 Cake\Controller\Controller::invokeAction() - CORE/src/Controller/Controller.php, line 610 Cake\Http\ActionDispatcher::_invoke() - CORE/src/Http/ActionDispatcher.php, line 120 Cake\Http\ActionDispatcher::dispatch() - CORE/src/Http/ActionDispatcher.php, line 94 Cake\Http\BaseApplication::__invoke() - CORE/src/Http/BaseApplication.php, line 235 Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65 Cake\Routing\Middleware\RoutingMiddleware::__invoke() - CORE/src/Routing/Middleware/RoutingMiddleware.php, line 162 Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65 Cake\Routing\Middleware\AssetMiddleware::__invoke() - CORE/src/Routing/Middleware/AssetMiddleware.php, line 88 Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65 Cake\Error\Middleware\ErrorHandlerMiddleware::__invoke() - CORE/src/Error/Middleware/ErrorHandlerMiddleware.php, line 96 Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65 Cake\Http\Runner::run() - CORE/src/Http/Runner.php, line 51 Cake\Http\Server::run() - CORE/src/Http/Server.php, line 98
Warning (512): Unable to emit headers. Headers sent in file=/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php line=853 [CORE/src/Http/ResponseEmitter.php, line 48]Code Contextif (Configure::read('debug')) {
trigger_error($message, E_USER_WARNING);
} else {
$response = object(Cake\Http\Response) { 'status' => (int) 200, 'contentType' => 'text/html', 'headers' => [ 'Content-Type' => [ [maximum depth reached] ] ], 'file' => null, 'fileRange' => [], 'cookies' => object(Cake\Http\Cookie\CookieCollection) {}, 'cacheDirectives' => [], 'body' => '<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"> <html xmlns="http://www.w3.org/1999/xhtml"> <head> <link rel="canonical" href="https://im4change.in/<pre class="cake-error"><a href="javascript:void(0);" onclick="document.getElementById('cakeErr67f42c23130cd-trace').style.display = (document.getElementById('cakeErr67f42c23130cd-trace').style.display == 'none' ? '' : 'none');"><b>Notice</b> (8)</a>: Undefined variable: urlPrefix [<b>APP/Template/Layout/printlayout.ctp</b>, line <b>8</b>]<div id="cakeErr67f42c23130cd-trace" class="cake-stack-trace" style="display: none;"><a href="javascript:void(0);" onclick="document.getElementById('cakeErr67f42c23130cd-code').style.display = (document.getElementById('cakeErr67f42c23130cd-code').style.display == 'none' ? '' : 'none')">Code</a> <a href="javascript:void(0);" onclick="document.getElementById('cakeErr67f42c23130cd-context').style.display = (document.getElementById('cakeErr67f42c23130cd-context').style.display == 'none' ? '' : 'none')">Context</a><pre id="cakeErr67f42c23130cd-code" class="cake-code-dump" style="display: none;"><code><span style="color: #000000"><span style="color: #0000BB"></span><span style="color: #007700"><</span><span style="color: #0000BB">head</span><span style="color: #007700">> </span></span></code> <span class="code-highlight"><code><span style="color: #000000"> <link rel="canonical" href="<span style="color: #0000BB"><?php </span><span style="color: #007700">echo </span><span style="color: #0000BB">Configure</span><span style="color: #007700">::</span><span style="color: #0000BB">read</span><span style="color: #007700">(</span><span style="color: #DD0000">'SITE_URL'</span><span style="color: #007700">); </span><span style="color: #0000BB">?><?php </span><span style="color: #007700">echo </span><span style="color: #0000BB">$urlPrefix</span><span style="color: #007700">;</span><span style="color: #0000BB">?><?php </span><span style="color: #007700">echo </span><span style="color: #0000BB">$article_current</span><span style="color: #007700">-></span><span style="color: #0000BB">category</span><span style="color: #007700">-></span><span style="color: #0000BB">slug</span><span style="color: #007700">; </span><span style="color: #0000BB">?></span>/<span style="color: #0000BB"><?php </span><span style="color: #007700">echo </span><span style="color: #0000BB">$article_current</span><span style="color: #007700">-></span><span style="color: #0000BB">seo_url</span><span style="color: #007700">; </span><span style="color: #0000BB">?></span>.html"/> </span></code></span> <code><span style="color: #000000"><span style="color: #0000BB"> </span><span style="color: #007700"><</span><span style="color: #0000BB">meta http</span><span style="color: #007700">-</span><span style="color: #0000BB">equiv</span><span style="color: #007700">=</span><span style="color: #DD0000">"Content-Type" </span><span style="color: #0000BB">content</span><span style="color: #007700">=</span><span style="color: #DD0000">"text/html; charset=utf-8"</span><span style="color: #007700">/> </span></span></code></pre><pre id="cakeErr67f42c23130cd-context" class="cake-context" style="display: none;">$viewFile = '/home/brlfuser/public_html/src/Template/Layout/printlayout.ctp' $dataForView = [ 'article_current' => object(App\Model\Entity\Article) { 'id' => (int) 63911, 'title' => 'Rationale behind raising interest rates -Sashwath Swaminathan nd Anand Srinivasan', 'subheading' => null, 'description' => '<p style="text-align:justify">-The Hindu</p> <p style="text-align:justify"><em>A critical facet of the consequences of an interest rate increase is the correction of asset prices. Interest rates act as gravity to stock market prices</em></p> <p style="text-align:justify">The Federal Reserve and other central banks around the world have raised interest rates to curb inflation. The rationale behind raising interest rates is that the cost of borrowing rises whenever they are raised, and the incentive to save and invest rather than consume increases due to better yields.</p> <p style="text-align:justify">It becomes more expensive to consume rather than save for the future as interest rates are higher. Therefore, the demand for goods reduces, leading to a drop in their prices. This leads to a reduction in wages being paid and a sustained drop in price levels which theoretically forestalls an inflationary spiral.</p> <p style="text-align:justify">Raising rates is the first tool for monetary intervention as it is the quickest way to drain excess liquidity in the market. When interest rates go up, real rates also rise, leading to the burden on the borrower increasing in real terms.</p> <p style="text-align:justify">Banks operate using a fractional reserve banking system wherein an initial amount of deposit grows multifold due to loans issued using the deposit. However, when rates are raised, this system of monetary expansion works in the opposite manner, contracting exponentially when debt is paid off or defaulted.</p> <p style="text-align:justify">Moreover, new loans are more expensive, and therefore, new borrowing slows down, decreasing inflationary pressures regardless of debt defaults or settlements. Another critical facet is the correction of asset prices. Interest rates act as gravity to stock prices. The main reason why stock prices drop when rates rise is due to lower consumption and, therefore, a nominal decline in profit.</p> <p style="text-align:justify">Please <a href="https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true">click here</a> to read more.&nbsp;</p> ', 'credit_writer' => 'The Hindu, 2 October, 2022, https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true', 'article_img' => '', 'article_img_thumb' => '', 'status' => (int) 1, 'show_on_home' => (int) 1, 'lang' => 'EN', 'category_id' => (int) 16, 'tag_keyword' => '', 'seo_url' => 'rationale-behind-raising-interest-rates-sashwath-swaminathan-nd-anand-srinivasan', 'meta_title' => '', 'meta_keywords' => '', 'meta_description' => '', 'noindex' => (int) 1, 'publish_date' => object(Cake\I18n\FrozenDate) {}, 'most_visit_section_id' => null, 'article_big_img' => null, 'liveid' => null, 'created' => object(Cake\I18n\FrozenTime) {}, 'modified' => object(Cake\I18n\FrozenTime) {}, 'edate' => '', 'tags' => [ [maximum depth reached] ], 'category' => object(App\Model\Entity\Category) {}, '[new]' => false, '[accessible]' => [ [maximum depth reached] ], '[dirty]' => [[maximum depth reached]], '[original]' => [[maximum depth reached]], '[virtual]' => [[maximum depth reached]], '[hasErrors]' => false, '[errors]' => [[maximum depth reached]], '[invalid]' => [[maximum depth reached]], '[repository]' => 'Articles' }, 'articleid' => (int) 63911, 'metaTitle' => 'LATEST NEWS UPDATES | Rationale behind raising interest rates -Sashwath Swaminathan nd Anand Srinivasan', 'metaKeywords' => 'Interest rate,Inflation,retail inflation,consumer demand', 'metaDesc' => '-The Hindu A critical facet of the consequences of an interest rate increase is the correction of asset prices. Interest rates act as gravity to stock market prices The Federal Reserve and other central banks around the world have raised interest rates...', 'disp' => '<p style="text-align:justify">-The Hindu</p><p style="text-align:justify"><em>A critical facet of the consequences of an interest rate increase is the correction of asset prices. Interest rates act as gravity to stock market prices</em></p><p style="text-align:justify">The Federal Reserve and other central banks around the world have raised interest rates to curb inflation. The rationale behind raising interest rates is that the cost of borrowing rises whenever they are raised, and the incentive to save and invest rather than consume increases due to better yields.</p><p style="text-align:justify">It becomes more expensive to consume rather than save for the future as interest rates are higher. Therefore, the demand for goods reduces, leading to a drop in their prices. This leads to a reduction in wages being paid and a sustained drop in price levels which theoretically forestalls an inflationary spiral.</p><p style="text-align:justify">Raising rates is the first tool for monetary intervention as it is the quickest way to drain excess liquidity in the market. When interest rates go up, real rates also rise, leading to the burden on the borrower increasing in real terms.</p><p style="text-align:justify">Banks operate using a fractional reserve banking system wherein an initial amount of deposit grows multifold due to loans issued using the deposit. However, when rates are raised, this system of monetary expansion works in the opposite manner, contracting exponentially when debt is paid off or defaulted.</p><p style="text-align:justify">Moreover, new loans are more expensive, and therefore, new borrowing slows down, decreasing inflationary pressures regardless of debt defaults or settlements. Another critical facet is the correction of asset prices. Interest rates act as gravity to stock prices. The main reason why stock prices drop when rates rise is due to lower consumption and, therefore, a nominal decline in profit.</p><p style="text-align:justify">Please <a href="https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true" title="https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true">click here</a> to read more.&nbsp;</p>', 'lang' => 'English', 'SITE_URL' => 'https://im4change.in/', 'site_title' => 'im4change', 'adminprix' => 'admin' ] $article_current = object(App\Model\Entity\Article) { 'id' => (int) 63911, 'title' => 'Rationale behind raising interest rates -Sashwath Swaminathan nd Anand Srinivasan', 'subheading' => null, 'description' => '<p style="text-align:justify">-The Hindu</p> <p style="text-align:justify"><em>A critical facet of the consequences of an interest rate increase is the correction of asset prices. 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When interest rates go up, real rates also rise, leading to the burden on the borrower increasing in real terms.</p> <p style="text-align:justify">Banks operate using a fractional reserve banking system wherein an initial amount of deposit grows multifold due to loans issued using the deposit. However, when rates are raised, this system of monetary expansion works in the opposite manner, contracting exponentially when debt is paid off or defaulted.</p> <p style="text-align:justify">Moreover, new loans are more expensive, and therefore, new borrowing slows down, decreasing inflationary pressures regardless of debt defaults or settlements. Another critical facet is the correction of asset prices. Interest rates act as gravity to stock prices. The main reason why stock prices drop when rates rise is due to lower consumption and, therefore, a nominal decline in profit.</p> <p style="text-align:justify">Please <a href="https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true">click here</a> to read more.&nbsp;</p> ', 'credit_writer' => 'The Hindu, 2 October, 2022, https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true', 'article_img' => '', 'article_img_thumb' => '', 'status' => (int) 1, 'show_on_home' => (int) 1, 'lang' => 'EN', 'category_id' => (int) 16, 'tag_keyword' => '', 'seo_url' => 'rationale-behind-raising-interest-rates-sashwath-swaminathan-nd-anand-srinivasan', 'meta_title' => '', 'meta_keywords' => '', 'meta_description' => '', 'noindex' => (int) 1, 'publish_date' => object(Cake\I18n\FrozenDate) {}, 'most_visit_section_id' => null, 'article_big_img' => null, 'liveid' => null, 'created' => object(Cake\I18n\FrozenTime) {}, 'modified' => object(Cake\I18n\FrozenTime) {}, 'edate' => '', 'tags' => [ (int) 0 => object(Cake\ORM\Entity) {}, (int) 1 => object(Cake\ORM\Entity) {}, (int) 2 => object(Cake\ORM\Entity) {}, (int) 3 => object(Cake\ORM\Entity) {} ], 'category' => object(App\Model\Entity\Category) {}, '[new]' => false, '[accessible]' => [ '*' => true, 'id' => false ], '[dirty]' => [], '[original]' => [], '[virtual]' => [], '[hasErrors]' => false, '[errors]' => [], '[invalid]' => [], '[repository]' => 'Articles' } $articleid = (int) 63911 $metaTitle = 'LATEST NEWS UPDATES | Rationale behind raising interest rates -Sashwath Swaminathan nd Anand Srinivasan' $metaKeywords = 'Interest rate,Inflation,retail inflation,consumer demand' $metaDesc = '-The Hindu A critical facet of the consequences of an interest rate increase is the correction of asset prices. Interest rates act as gravity to stock market prices The Federal Reserve and other central banks around the world have raised interest rates...' $disp = '<p style="text-align:justify">-The Hindu</p><p style="text-align:justify"><em>A critical facet of the consequences of an interest rate increase is the correction of asset prices. Interest rates act as gravity to stock market prices</em></p><p style="text-align:justify">The Federal Reserve and other central banks around the world have raised interest rates to curb inflation. The rationale behind raising interest rates is that the cost of borrowing rises whenever they are raised, and the incentive to save and invest rather than consume increases due to better yields.</p><p style="text-align:justify">It becomes more expensive to consume rather than save for the future as interest rates are higher. Therefore, the demand for goods reduces, leading to a drop in their prices. This leads to a reduction in wages being paid and a sustained drop in price levels which theoretically forestalls an inflationary spiral.</p><p style="text-align:justify">Raising rates is the first tool for monetary intervention as it is the quickest way to drain excess liquidity in the market. When interest rates go up, real rates also rise, leading to the burden on the borrower increasing in real terms.</p><p style="text-align:justify">Banks operate using a fractional reserve banking system wherein an initial amount of deposit grows multifold due to loans issued using the deposit. However, when rates are raised, this system of monetary expansion works in the opposite manner, contracting exponentially when debt is paid off or defaulted.</p><p style="text-align:justify">Moreover, new loans are more expensive, and therefore, new borrowing slows down, decreasing inflationary pressures regardless of debt defaults or settlements. Another critical facet is the correction of asset prices. Interest rates act as gravity to stock prices. The main reason why stock prices drop when rates rise is due to lower consumption and, therefore, a nominal decline in profit.</p><p style="text-align:justify">Please <a href="https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true" title="https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true">click here</a> to read more.&nbsp;</p>' $lang = 'English' $SITE_URL = 'https://im4change.in/' $site_title = 'im4change' $adminprix = 'admin'</pre><pre class="stack-trace">include - APP/Template/Layout/printlayout.ctp, line 8 Cake\View\View::_evaluate() - CORE/src/View/View.php, line 1413 Cake\View\View::_render() - CORE/src/View/View.php, line 1374 Cake\View\View::renderLayout() - CORE/src/View/View.php, line 927 Cake\View\View::render() - CORE/src/View/View.php, line 885 Cake\Controller\Controller::render() - CORE/src/Controller/Controller.php, line 791 Cake\Http\ActionDispatcher::_invoke() - CORE/src/Http/ActionDispatcher.php, line 126 Cake\Http\ActionDispatcher::dispatch() - CORE/src/Http/ActionDispatcher.php, line 94 Cake\Http\BaseApplication::__invoke() - CORE/src/Http/BaseApplication.php, line 235 Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65 Cake\Routing\Middleware\RoutingMiddleware::__invoke() - CORE/src/Routing/Middleware/RoutingMiddleware.php, line 162 Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65 Cake\Routing\Middleware\AssetMiddleware::__invoke() - CORE/src/Routing/Middleware/AssetMiddleware.php, line 88 Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65 Cake\Error\Middleware\ErrorHandlerMiddleware::__invoke() - CORE/src/Error/Middleware/ErrorHandlerMiddleware.php, line 96 Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65 Cake\Http\Runner::run() - CORE/src/Http/Runner.php, line 51</pre></div></pre>latest-news-updates/rationale-behind-raising-interest-rates-sashwath-swaminathan-nd-anand-srinivasan.html"/> <meta http-equiv="Content-Type" content="text/html; charset=utf-8"/> <link href="https://im4change.in/css/control.css" rel="stylesheet" type="text/css" media="all"/> <title>LATEST NEWS UPDATES | Rationale behind raising interest rates -Sashwath Swaminathan nd Anand Srinivasan | Im4change.org</title> <meta name="description" content="-The Hindu A critical facet of the consequences of an interest rate increase is the correction of asset prices. Interest rates act as gravity to stock market prices The Federal Reserve and other central banks around the world have raised interest rates..."/> <script src="https://im4change.in/js/jquery-1.10.2.js"></script> <script type="text/javascript" src="https://im4change.in/js/jquery-migrate.min.js"></script> <script language="javascript" type="text/javascript"> $(document).ready(function () { var img = $("img")[0]; // Get my img elem var pic_real_width, pic_real_height; $("<img/>") // Make in memory copy of image to avoid css issues .attr("src", $(img).attr("src")) .load(function () { pic_real_width = this.width; // Note: $(this).width() will not pic_real_height = this.height; // work for in memory images. }); }); </script> <style type="text/css"> @media screen { div.divFooter { display: block; } } @media print { .printbutton { display: none !important; } } </style> </head> <body> <table cellpadding="0" cellspacing="0" border="0" width="98%" align="center"> <tr> <td class="top_bg"> <div class="divFooter"> <img src="https://im4change.in/images/logo1.jpg" height="59" border="0" alt="Resource centre on India's rural distress" style="padding-top:14px;"/> </div> </td> </tr> <tr> <td id="topspace"> </td> </tr> <tr id="topspace"> <td> </td> </tr> <tr> <td height="50" style="border-bottom:1px solid #000; padding-top:10px;" class="printbutton"> <form><input type="button" value=" Print this page " onclick="window.print();return false;"/></form> </td> </tr> <tr> <td width="100%"> <h1 class="news_headlines" style="font-style:normal"> <strong>Rationale behind raising interest rates -Sashwath Swaminathan nd Anand Srinivasan</strong></h1> </td> </tr> <tr> <td width="100%" style="font-family:Arial, 'Segoe Script', 'Segoe UI', sans-serif, serif"><font size="3"> <p style="text-align:justify">-The Hindu</p><p style="text-align:justify"><em>A critical facet of the consequences of an interest rate increase is the correction of asset prices. Interest rates act as gravity to stock market prices</em></p><p style="text-align:justify">The Federal Reserve and other central banks around the world have raised interest rates to curb inflation. The rationale behind raising interest rates is that the cost of borrowing rises whenever they are raised, and the incentive to save and invest rather than consume increases due to better yields.</p><p style="text-align:justify">It becomes more expensive to consume rather than save for the future as interest rates are higher. Therefore, the demand for goods reduces, leading to a drop in their prices. This leads to a reduction in wages being paid and a sustained drop in price levels which theoretically forestalls an inflationary spiral.</p><p style="text-align:justify">Raising rates is the first tool for monetary intervention as it is the quickest way to drain excess liquidity in the market. When interest rates go up, real rates also rise, leading to the burden on the borrower increasing in real terms.</p><p style="text-align:justify">Banks operate using a fractional reserve banking system wherein an initial amount of deposit grows multifold due to loans issued using the deposit. However, when rates are raised, this system of monetary expansion works in the opposite manner, contracting exponentially when debt is paid off or defaulted.</p><p style="text-align:justify">Moreover, new loans are more expensive, and therefore, new borrowing slows down, decreasing inflationary pressures regardless of debt defaults or settlements. Another critical facet is the correction of asset prices. Interest rates act as gravity to stock prices. The main reason why stock prices drop when rates rise is due to lower consumption and, therefore, a nominal decline in profit.</p><p style="text-align:justify">Please <a href="https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true" title="https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true">click here</a> to read more. </p> </font> </td> </tr> <tr> <td> </td> </tr> <tr> <td height="50" style="border-top:1px solid #000; border-bottom:1px solid #000;padding-top:10px;"> <form><input type="button" value=" Print this page " onclick="window.print();return false;"/></form> </td> </tr> </table></body> </html>' } $maxBufferLength = (int) 8192 $file = '/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php' $line = (int) 853 $message = 'Unable to emit headers. 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'' : 'none')">Context</a><pre id="cakeErr67f42c23130cd-code" class="cake-code-dump" style="display: none;"><code><span style="color: #000000"><span style="color: #0000BB"></span><span style="color: #007700"><</span><span style="color: #0000BB">head</span><span style="color: #007700">> </span></span></code> <span class="code-highlight"><code><span style="color: #000000"> <link rel="canonical" href="<span style="color: #0000BB"><?php </span><span style="color: #007700">echo </span><span style="color: #0000BB">Configure</span><span style="color: #007700">::</span><span style="color: #0000BB">read</span><span style="color: #007700">(</span><span style="color: #DD0000">'SITE_URL'</span><span style="color: #007700">); </span><span style="color: #0000BB">?><?php </span><span style="color: #007700">echo </span><span style="color: #0000BB">$urlPrefix</span><span style="color: #007700">;</span><span style="color: #0000BB">?><?php </span><span style="color: #007700">echo </span><span style="color: #0000BB">$article_current</span><span style="color: #007700">-></span><span style="color: #0000BB">category</span><span style="color: #007700">-></span><span style="color: #0000BB">slug</span><span style="color: #007700">; </span><span style="color: #0000BB">?></span>/<span style="color: #0000BB"><?php </span><span style="color: #007700">echo </span><span style="color: #0000BB">$article_current</span><span style="color: #007700">-></span><span style="color: #0000BB">seo_url</span><span style="color: #007700">; </span><span style="color: #0000BB">?></span>.html"/> </span></code></span> <code><span style="color: #000000"><span style="color: #0000BB"> </span><span style="color: #007700"><</span><span style="color: #0000BB">meta http</span><span style="color: #007700">-</span><span style="color: #0000BB">equiv</span><span style="color: #007700">=</span><span style="color: #DD0000">"Content-Type" </span><span style="color: #0000BB">content</span><span style="color: #007700">=</span><span style="color: #DD0000">"text/html; charset=utf-8"</span><span style="color: #007700">/> </span></span></code></pre><pre id="cakeErr67f42c23130cd-context" class="cake-context" style="display: none;">$viewFile = '/home/brlfuser/public_html/src/Template/Layout/printlayout.ctp' $dataForView = [ 'article_current' => object(App\Model\Entity\Article) { 'id' => (int) 63911, 'title' => 'Rationale behind raising interest rates -Sashwath Swaminathan nd Anand Srinivasan', 'subheading' => null, 'description' => '<p style="text-align:justify">-The Hindu</p> <p style="text-align:justify"><em>A critical facet of the consequences of an interest rate increase is the correction of asset prices. Interest rates act as gravity to stock market prices</em></p> <p style="text-align:justify">The Federal Reserve and other central banks around the world have raised interest rates to curb inflation. The rationale behind raising interest rates is that the cost of borrowing rises whenever they are raised, and the incentive to save and invest rather than consume increases due to better yields.</p> <p style="text-align:justify">It becomes more expensive to consume rather than save for the future as interest rates are higher. Therefore, the demand for goods reduces, leading to a drop in their prices. This leads to a reduction in wages being paid and a sustained drop in price levels which theoretically forestalls an inflationary spiral.</p> <p style="text-align:justify">Raising rates is the first tool for monetary intervention as it is the quickest way to drain excess liquidity in the market. When interest rates go up, real rates also rise, leading to the burden on the borrower increasing in real terms.</p> <p style="text-align:justify">Banks operate using a fractional reserve banking system wherein an initial amount of deposit grows multifold due to loans issued using the deposit. However, when rates are raised, this system of monetary expansion works in the opposite manner, contracting exponentially when debt is paid off or defaulted.</p> <p style="text-align:justify">Moreover, new loans are more expensive, and therefore, new borrowing slows down, decreasing inflationary pressures regardless of debt defaults or settlements. Another critical facet is the correction of asset prices. Interest rates act as gravity to stock prices. The main reason why stock prices drop when rates rise is due to lower consumption and, therefore, a nominal decline in profit.</p> <p style="text-align:justify">Please <a href="https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true">click here</a> to read more.&nbsp;</p> ', 'credit_writer' => 'The Hindu, 2 October, 2022, https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true', 'article_img' => '', 'article_img_thumb' => '', 'status' => (int) 1, 'show_on_home' => (int) 1, 'lang' => 'EN', 'category_id' => (int) 16, 'tag_keyword' => '', 'seo_url' => 'rationale-behind-raising-interest-rates-sashwath-swaminathan-nd-anand-srinivasan', 'meta_title' => '', 'meta_keywords' => '', 'meta_description' => '', 'noindex' => (int) 1, 'publish_date' => object(Cake\I18n\FrozenDate) {}, 'most_visit_section_id' => null, 'article_big_img' => null, 'liveid' => null, 'created' => object(Cake\I18n\FrozenTime) {}, 'modified' => object(Cake\I18n\FrozenTime) {}, 'edate' => '', 'tags' => [ [maximum depth reached] ], 'category' => object(App\Model\Entity\Category) {}, '[new]' => false, '[accessible]' => [ [maximum depth reached] ], '[dirty]' => [[maximum depth reached]], '[original]' => [[maximum depth reached]], '[virtual]' => [[maximum depth reached]], '[hasErrors]' => false, '[errors]' => [[maximum depth reached]], '[invalid]' => [[maximum depth reached]], '[repository]' => 'Articles' }, 'articleid' => (int) 63911, 'metaTitle' => 'LATEST NEWS UPDATES | Rationale behind raising interest rates -Sashwath Swaminathan nd Anand Srinivasan', 'metaKeywords' => 'Interest rate,Inflation,retail inflation,consumer demand', 'metaDesc' => '-The Hindu A critical facet of the consequences of an interest rate increase is the correction of asset prices. 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This leads to a reduction in wages being paid and a sustained drop in price levels which theoretically forestalls an inflationary spiral.</p><p style="text-align:justify">Raising rates is the first tool for monetary intervention as it is the quickest way to drain excess liquidity in the market. When interest rates go up, real rates also rise, leading to the burden on the borrower increasing in real terms.</p><p style="text-align:justify">Banks operate using a fractional reserve banking system wherein an initial amount of deposit grows multifold due to loans issued using the deposit. However, when rates are raised, this system of monetary expansion works in the opposite manner, contracting exponentially when debt is paid off or defaulted.</p><p style="text-align:justify">Moreover, new loans are more expensive, and therefore, new borrowing slows down, decreasing inflationary pressures regardless of debt defaults or settlements. Another critical facet is the correction of asset prices. Interest rates act as gravity to stock prices. The main reason why stock prices drop when rates rise is due to lower consumption and, therefore, a nominal decline in profit.</p><p style="text-align:justify">Please <a href="https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true" title="https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true">click here</a> to read more.&nbsp;</p>', 'lang' => 'English', 'SITE_URL' => 'https://im4change.in/', 'site_title' => 'im4change', 'adminprix' => 'admin' ] $article_current = object(App\Model\Entity\Article) { 'id' => (int) 63911, 'title' => 'Rationale behind raising interest rates -Sashwath Swaminathan nd Anand Srinivasan', 'subheading' => null, 'description' => '<p style="text-align:justify">-The Hindu</p> <p style="text-align:justify"><em>A critical facet of the consequences of an interest rate increase is the correction of asset prices. Interest rates act as gravity to stock market prices</em></p> <p style="text-align:justify">The Federal Reserve and other central banks around the world have raised interest rates to curb inflation. The rationale behind raising interest rates is that the cost of borrowing rises whenever they are raised, and the incentive to save and invest rather than consume increases due to better yields.</p> <p style="text-align:justify">It becomes more expensive to consume rather than save for the future as interest rates are higher. Therefore, the demand for goods reduces, leading to a drop in their prices. This leads to a reduction in wages being paid and a sustained drop in price levels which theoretically forestalls an inflationary spiral.</p> <p style="text-align:justify">Raising rates is the first tool for monetary intervention as it is the quickest way to drain excess liquidity in the market. 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The main reason why stock prices drop when rates rise is due to lower consumption and, therefore, a nominal decline in profit.</p> <p style="text-align:justify">Please <a href="https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true">click here</a> to read more.&nbsp;</p> ', 'credit_writer' => 'The Hindu, 2 October, 2022, https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true', 'article_img' => '', 'article_img_thumb' => '', 'status' => (int) 1, 'show_on_home' => (int) 1, 'lang' => 'EN', 'category_id' => (int) 16, 'tag_keyword' => '', 'seo_url' => 'rationale-behind-raising-interest-rates-sashwath-swaminathan-nd-anand-srinivasan', 'meta_title' => '', 'meta_keywords' => '', 'meta_description' => '', 'noindex' => (int) 1, 'publish_date' => object(Cake\I18n\FrozenDate) {}, 'most_visit_section_id' => null, 'article_big_img' => null, 'liveid' => null, 'created' => object(Cake\I18n\FrozenTime) {}, 'modified' => object(Cake\I18n\FrozenTime) {}, 'edate' => '', 'tags' => [ (int) 0 => object(Cake\ORM\Entity) {}, (int) 1 => object(Cake\ORM\Entity) {}, (int) 2 => object(Cake\ORM\Entity) {}, (int) 3 => object(Cake\ORM\Entity) {} ], 'category' => object(App\Model\Entity\Category) {}, '[new]' => false, '[accessible]' => [ '*' => true, 'id' => false ], '[dirty]' => [], '[original]' => [], '[virtual]' => [], '[hasErrors]' => false, '[errors]' => [], '[invalid]' => [], '[repository]' => 'Articles' } $articleid = (int) 63911 $metaTitle = 'LATEST NEWS UPDATES | Rationale behind raising interest rates -Sashwath Swaminathan nd Anand Srinivasan' $metaKeywords = 'Interest rate,Inflation,retail inflation,consumer demand' $metaDesc = '-The Hindu A critical facet of the consequences of an interest rate increase is the correction of asset prices. Interest rates act as gravity to stock market prices The Federal Reserve and other central banks around the world have raised interest rates...' $disp = '<p style="text-align:justify">-The Hindu</p><p style="text-align:justify"><em>A critical facet of the consequences of an interest rate increase is the correction of asset prices. Interest rates act as gravity to stock market prices</em></p><p style="text-align:justify">The Federal Reserve and other central banks around the world have raised interest rates to curb inflation. The rationale behind raising interest rates is that the cost of borrowing rises whenever they are raised, and the incentive to save and invest rather than consume increases due to better yields.</p><p style="text-align:justify">It becomes more expensive to consume rather than save for the future as interest rates are higher. Therefore, the demand for goods reduces, leading to a drop in their prices. This leads to a reduction in wages being paid and a sustained drop in price levels which theoretically forestalls an inflationary spiral.</p><p style="text-align:justify">Raising rates is the first tool for monetary intervention as it is the quickest way to drain excess liquidity in the market. When interest rates go up, real rates also rise, leading to the burden on the borrower increasing in real terms.</p><p style="text-align:justify">Banks operate using a fractional reserve banking system wherein an initial amount of deposit grows multifold due to loans issued using the deposit. However, when rates are raised, this system of monetary expansion works in the opposite manner, contracting exponentially when debt is paid off or defaulted.</p><p style="text-align:justify">Moreover, new loans are more expensive, and therefore, new borrowing slows down, decreasing inflationary pressures regardless of debt defaults or settlements. Another critical facet is the correction of asset prices. Interest rates act as gravity to stock prices. The main reason why stock prices drop when rates rise is due to lower consumption and, therefore, a nominal decline in profit.</p><p style="text-align:justify">Please <a href="https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true" title="https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true">click here</a> to read more.&nbsp;</p>' $lang = 'English' $SITE_URL = 'https://im4change.in/' $site_title = 'im4change' $adminprix = 'admin'</pre><pre class="stack-trace">include - APP/Template/Layout/printlayout.ctp, line 8 Cake\View\View::_evaluate() - CORE/src/View/View.php, line 1413 Cake\View\View::_render() - CORE/src/View/View.php, line 1374 Cake\View\View::renderLayout() - CORE/src/View/View.php, line 927 Cake\View\View::render() - CORE/src/View/View.php, line 885 Cake\Controller\Controller::render() - CORE/src/Controller/Controller.php, line 791 Cake\Http\ActionDispatcher::_invoke() - CORE/src/Http/ActionDispatcher.php, line 126 Cake\Http\ActionDispatcher::dispatch() - CORE/src/Http/ActionDispatcher.php, line 94 Cake\Http\BaseApplication::__invoke() - CORE/src/Http/BaseApplication.php, line 235 Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65 Cake\Routing\Middleware\RoutingMiddleware::__invoke() - CORE/src/Routing/Middleware/RoutingMiddleware.php, line 162 Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65 Cake\Routing\Middleware\AssetMiddleware::__invoke() - CORE/src/Routing/Middleware/AssetMiddleware.php, line 88 Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65 Cake\Error\Middleware\ErrorHandlerMiddleware::__invoke() - CORE/src/Error/Middleware/ErrorHandlerMiddleware.php, line 96 Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65 Cake\Http\Runner::run() - CORE/src/Http/Runner.php, line 51</pre></div></pre>latest-news-updates/rationale-behind-raising-interest-rates-sashwath-swaminathan-nd-anand-srinivasan.html"/> <meta http-equiv="Content-Type" content="text/html; charset=utf-8"/> <link href="https://im4change.in/css/control.css" rel="stylesheet" type="text/css" media="all"/> <title>LATEST NEWS UPDATES | Rationale behind raising interest rates -Sashwath Swaminathan nd Anand Srinivasan | Im4change.org</title> <meta name="description" content="-The Hindu A critical facet of the consequences of an interest rate increase is the correction of asset prices. Interest rates act as gravity to stock market prices The Federal Reserve and other central banks around the world have raised interest rates..."/> <script src="https://im4change.in/js/jquery-1.10.2.js"></script> <script type="text/javascript" src="https://im4change.in/js/jquery-migrate.min.js"></script> <script language="javascript" type="text/javascript"> $(document).ready(function () { var img = $("img")[0]; // Get my img elem var pic_real_width, pic_real_height; $("<img/>") // Make in memory copy of image to avoid css issues .attr("src", $(img).attr("src")) .load(function () { pic_real_width = this.width; // Note: $(this).width() will not pic_real_height = this.height; // work for in memory images. }); }); </script> <style type="text/css"> @media screen { div.divFooter { display: block; } } @media print { .printbutton { display: none !important; } } </style> </head> <body> <table cellpadding="0" cellspacing="0" border="0" width="98%" align="center"> <tr> <td class="top_bg"> <div class="divFooter"> <img src="https://im4change.in/images/logo1.jpg" height="59" border="0" alt="Resource centre on India's rural distress" style="padding-top:14px;"/> </div> </td> </tr> <tr> <td id="topspace"> </td> </tr> <tr id="topspace"> <td> </td> </tr> <tr> <td height="50" style="border-bottom:1px solid #000; padding-top:10px;" class="printbutton"> <form><input type="button" value=" Print this page " onclick="window.print();return false;"/></form> </td> </tr> <tr> <td width="100%"> <h1 class="news_headlines" style="font-style:normal"> <strong>Rationale behind raising interest rates -Sashwath Swaminathan nd Anand Srinivasan</strong></h1> </td> </tr> <tr> <td width="100%" style="font-family:Arial, 'Segoe Script', 'Segoe UI', sans-serif, serif"><font size="3"> <p style="text-align:justify">-The Hindu</p><p style="text-align:justify"><em>A critical facet of the consequences of an interest rate increase is the correction of asset prices. Interest rates act as gravity to stock market prices</em></p><p style="text-align:justify">The Federal Reserve and other central banks around the world have raised interest rates to curb inflation. The rationale behind raising interest rates is that the cost of borrowing rises whenever they are raised, and the incentive to save and invest rather than consume increases due to better yields.</p><p style="text-align:justify">It becomes more expensive to consume rather than save for the future as interest rates are higher. Therefore, the demand for goods reduces, leading to a drop in their prices. This leads to a reduction in wages being paid and a sustained drop in price levels which theoretically forestalls an inflationary spiral.</p><p style="text-align:justify">Raising rates is the first tool for monetary intervention as it is the quickest way to drain excess liquidity in the market. When interest rates go up, real rates also rise, leading to the burden on the borrower increasing in real terms.</p><p style="text-align:justify">Banks operate using a fractional reserve banking system wherein an initial amount of deposit grows multifold due to loans issued using the deposit. However, when rates are raised, this system of monetary expansion works in the opposite manner, contracting exponentially when debt is paid off or defaulted.</p><p style="text-align:justify">Moreover, new loans are more expensive, and therefore, new borrowing slows down, decreasing inflationary pressures regardless of debt defaults or settlements. Another critical facet is the correction of asset prices. Interest rates act as gravity to stock prices. The main reason why stock prices drop when rates rise is due to lower consumption and, therefore, a nominal decline in profit.</p><p style="text-align:justify">Please <a href="https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true" title="https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true">click here</a> to read more. </p> </font> </td> </tr> <tr> <td> </td> </tr> <tr> <td height="50" style="border-top:1px solid #000; border-bottom:1px solid #000;padding-top:10px;"> <form><input type="button" value=" Print this page " onclick="window.print();return false;"/></form> </td> </tr> </table></body> </html>' } $reasonPhrase = 'OK'header - [internal], line ?? 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When interest rates go up, real rates also rise, leading to the burden on the borrower increasing in real terms.</p> <p style="text-align:justify">Banks operate using a fractional reserve banking system wherein an initial amount of deposit grows multifold due to loans issued using the deposit. However, when rates are raised, this system of monetary expansion works in the opposite manner, contracting exponentially when debt is paid off or defaulted.</p> <p style="text-align:justify">Moreover, new loans are more expensive, and therefore, new borrowing slows down, decreasing inflationary pressures regardless of debt defaults or settlements. Another critical facet is the correction of asset prices. Interest rates act as gravity to stock prices. The main reason why stock prices drop when rates rise is due to lower consumption and, therefore, a nominal decline in profit.</p> <p style="text-align:justify">Please <a href="https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true">click here</a> to read more.&nbsp;</p> ', 'credit_writer' => 'The Hindu, 2 October, 2022, https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true', 'article_img' => '', 'article_img_thumb' => '', 'status' => (int) 1, 'show_on_home' => (int) 1, 'lang' => 'EN', 'category_id' => (int) 16, 'tag_keyword' => '', 'seo_url' => 'rationale-behind-raising-interest-rates-sashwath-swaminathan-nd-anand-srinivasan', 'meta_title' => '', 'meta_keywords' => '', 'meta_description' => '', 'noindex' => (int) 1, 'publish_date' => object(Cake\I18n\FrozenDate) {}, 'most_visit_section_id' => null, 'article_big_img' => null, 'liveid' => null, 'created' => object(Cake\I18n\FrozenTime) {}, 'modified' => object(Cake\I18n\FrozenTime) {}, 'edate' => '', 'tags' => [ (int) 0 => object(Cake\ORM\Entity) {}, (int) 1 => object(Cake\ORM\Entity) {}, (int) 2 => object(Cake\ORM\Entity) {}, (int) 3 => object(Cake\ORM\Entity) {} ], 'category' => object(App\Model\Entity\Category) {}, '[new]' => false, '[accessible]' => [ '*' => true, 'id' => false ], '[dirty]' => [], '[original]' => [], '[virtual]' => [], '[hasErrors]' => false, '[errors]' => [], '[invalid]' => [], '[repository]' => 'Articles' } $articleid = (int) 63911 $metaTitle = 'LATEST NEWS UPDATES | Rationale behind raising interest rates -Sashwath Swaminathan nd Anand Srinivasan' $metaKeywords = 'Interest rate,Inflation,retail inflation,consumer demand' $metaDesc = '-The Hindu A critical facet of the consequences of an interest rate increase is the correction of asset prices. Interest rates act as gravity to stock market prices The Federal Reserve and other central banks around the world have raised interest rates...' $disp = '<p style="text-align:justify">-The Hindu</p><p style="text-align:justify"><em>A critical facet of the consequences of an interest rate increase is the correction of asset prices. Interest rates act as gravity to stock market prices</em></p><p style="text-align:justify">The Federal Reserve and other central banks around the world have raised interest rates to curb inflation. The rationale behind raising interest rates is that the cost of borrowing rises whenever they are raised, and the incentive to save and invest rather than consume increases due to better yields.</p><p style="text-align:justify">It becomes more expensive to consume rather than save for the future as interest rates are higher. Therefore, the demand for goods reduces, leading to a drop in their prices. This leads to a reduction in wages being paid and a sustained drop in price levels which theoretically forestalls an inflationary spiral.</p><p style="text-align:justify">Raising rates is the first tool for monetary intervention as it is the quickest way to drain excess liquidity in the market. When interest rates go up, real rates also rise, leading to the burden on the borrower increasing in real terms.</p><p style="text-align:justify">Banks operate using a fractional reserve banking system wherein an initial amount of deposit grows multifold due to loans issued using the deposit. However, when rates are raised, this system of monetary expansion works in the opposite manner, contracting exponentially when debt is paid off or defaulted.</p><p style="text-align:justify">Moreover, new loans are more expensive, and therefore, new borrowing slows down, decreasing inflationary pressures regardless of debt defaults or settlements. Another critical facet is the correction of asset prices. Interest rates act as gravity to stock prices. The main reason why stock prices drop when rates rise is due to lower consumption and, therefore, a nominal decline in profit.</p><p style="text-align:justify">Please <a href="https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true" title="https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true">click here</a> to read more.&nbsp;</p>' $lang = 'English' $SITE_URL = 'https://im4change.in/' $site_title = 'im4change' $adminprix = 'admin'</pre><pre class="stack-trace">include - APP/Template/Layout/printlayout.ctp, line 8 Cake\View\View::_evaluate() - CORE/src/View/View.php, line 1413 Cake\View\View::_render() - CORE/src/View/View.php, line 1374 Cake\View\View::renderLayout() - CORE/src/View/View.php, line 927 Cake\View\View::render() - CORE/src/View/View.php, line 885 Cake\Controller\Controller::render() - CORE/src/Controller/Controller.php, line 791 Cake\Http\ActionDispatcher::_invoke() - CORE/src/Http/ActionDispatcher.php, line 126 Cake\Http\ActionDispatcher::dispatch() - CORE/src/Http/ActionDispatcher.php, line 94 Cake\Http\BaseApplication::__invoke() - CORE/src/Http/BaseApplication.php, line 235 Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65 Cake\Routing\Middleware\RoutingMiddleware::__invoke() - CORE/src/Routing/Middleware/RoutingMiddleware.php, line 162 Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65 Cake\Routing\Middleware\AssetMiddleware::__invoke() - CORE/src/Routing/Middleware/AssetMiddleware.php, line 88 Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65 Cake\Error\Middleware\ErrorHandlerMiddleware::__invoke() - CORE/src/Error/Middleware/ErrorHandlerMiddleware.php, line 96 Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65 Cake\Http\Runner::run() - CORE/src/Http/Runner.php, line 51</pre></div></pre>latest-news-updates/rationale-behind-raising-interest-rates-sashwath-swaminathan-nd-anand-srinivasan.html"/> <meta http-equiv="Content-Type" content="text/html; charset=utf-8"/> <link href="https://im4change.in/css/control.css" rel="stylesheet" type="text/css" media="all"/> <title>LATEST NEWS UPDATES | Rationale behind raising interest rates -Sashwath Swaminathan nd Anand Srinivasan | Im4change.org</title> <meta name="description" content="-The Hindu A critical facet of the consequences of an interest rate increase is the correction of asset prices. 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Interest rates act as gravity to stock market prices</em></p><p style="text-align:justify">The Federal Reserve and other central banks around the world have raised interest rates to curb inflation. The rationale behind raising interest rates is that the cost of borrowing rises whenever they are raised, and the incentive to save and invest rather than consume increases due to better yields.</p><p style="text-align:justify">It becomes more expensive to consume rather than save for the future as interest rates are higher. Therefore, the demand for goods reduces, leading to a drop in their prices. This leads to a reduction in wages being paid and a sustained drop in price levels which theoretically forestalls an inflationary spiral.</p><p style="text-align:justify">Raising rates is the first tool for monetary intervention as it is the quickest way to drain excess liquidity in the market. When interest rates go up, real rates also rise, leading to the burden on the borrower increasing in real terms.</p><p style="text-align:justify">Banks operate using a fractional reserve banking system wherein an initial amount of deposit grows multifold due to loans issued using the deposit. However, when rates are raised, this system of monetary expansion works in the opposite manner, contracting exponentially when debt is paid off or defaulted.</p><p style="text-align:justify">Moreover, new loans are more expensive, and therefore, new borrowing slows down, decreasing inflationary pressures regardless of debt defaults or settlements. Another critical facet is the correction of asset prices. Interest rates act as gravity to stock prices. The main reason why stock prices drop when rates rise is due to lower consumption and, therefore, a nominal decline in profit.</p><p style="text-align:justify">Please <a href="https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true" title="https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true">click here</a> to read more. </p> </font> </td> </tr> <tr> <td> </td> </tr> <tr> <td height="50" style="border-top:1px solid #000; border-bottom:1px solid #000;padding-top:10px;"> <form><input type="button" value=" Print this page " onclick="window.print();return false;"/></form> </td> </tr> </table></body> </html>' } $cookies = [] $values = [ (int) 0 => 'text/html; charset=UTF-8' ] $name = 'Content-Type' $first = true $value = 'text/html; charset=UTF-8'header - [internal], line ?? 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The rationale behind raising interest rates is that the cost of borrowing rises whenever they are raised, and the incentive to save and invest rather than consume increases due to better yields.</p> <p style="text-align:justify">It becomes more expensive to consume rather than save for the future as interest rates are higher. Therefore, the demand for goods reduces, leading to a drop in their prices. This leads to a reduction in wages being paid and a sustained drop in price levels which theoretically forestalls an inflationary spiral.</p> <p style="text-align:justify">Raising rates is the first tool for monetary intervention as it is the quickest way to drain excess liquidity in the market. When interest rates go up, real rates also rise, leading to the burden on the borrower increasing in real terms.</p> <p style="text-align:justify">Banks operate using a fractional reserve banking system wherein an initial amount of deposit grows multifold due to loans issued using the deposit. However, when rates are raised, this system of monetary expansion works in the opposite manner, contracting exponentially when debt is paid off or defaulted.</p> <p style="text-align:justify">Moreover, new loans are more expensive, and therefore, new borrowing slows down, decreasing inflationary pressures regardless of debt defaults or settlements. Another critical facet is the correction of asset prices. Interest rates act as gravity to stock prices. The main reason why stock prices drop when rates rise is due to lower consumption and, therefore, a nominal decline in profit.</p> <p style="text-align:justify">Please <a href="https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true">click here</a> to read more. </p> ', 'credit_writer' => 'The Hindu, 2 October, 2022, https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true', 'article_img' => '', 'article_img_thumb' => '', 'status' => (int) 1, 'show_on_home' => (int) 1, 'lang' => 'EN', 'category_id' => (int) 16, 'tag_keyword' => '', 'seo_url' => 'rationale-behind-raising-interest-rates-sashwath-swaminathan-nd-anand-srinivasan', 'meta_title' => '', 'meta_keywords' => '', 'meta_description' => '', 'noindex' => (int) 1, 'publish_date' => object(Cake\I18n\FrozenDate) {}, 'most_visit_section_id' => null, 'article_big_img' => null, 'liveid' => null, 'created' => object(Cake\I18n\FrozenTime) {}, 'modified' => object(Cake\I18n\FrozenTime) {}, 'edate' => '', 'tags' => [ [maximum depth reached] ], 'category' => object(App\Model\Entity\Category) {}, '[new]' => false, '[accessible]' => [ [maximum depth reached] ], '[dirty]' => [[maximum depth reached]], '[original]' => [[maximum depth reached]], '[virtual]' => [[maximum depth reached]], '[hasErrors]' => false, '[errors]' => [[maximum depth reached]], '[invalid]' => [[maximum depth reached]], '[repository]' => 'Articles' }, 'articleid' => (int) 63911, 'metaTitle' => 'LATEST NEWS UPDATES | Rationale behind raising interest rates -Sashwath Swaminathan nd Anand Srinivasan', 'metaKeywords' => 'Interest rate,Inflation,retail inflation,consumer demand', 'metaDesc' => '-The Hindu A critical facet of the consequences of an interest rate increase is the correction of asset prices. 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This leads to a reduction in wages being paid and a sustained drop in price levels which theoretically forestalls an inflationary spiral.</p><p style="text-align:justify">Raising rates is the first tool for monetary intervention as it is the quickest way to drain excess liquidity in the market. When interest rates go up, real rates also rise, leading to the burden on the borrower increasing in real terms.</p><p style="text-align:justify">Banks operate using a fractional reserve banking system wherein an initial amount of deposit grows multifold due to loans issued using the deposit. However, when rates are raised, this system of monetary expansion works in the opposite manner, contracting exponentially when debt is paid off or defaulted.</p><p style="text-align:justify">Moreover, new loans are more expensive, and therefore, new borrowing slows down, decreasing inflationary pressures regardless of debt defaults or settlements. Another critical facet is the correction of asset prices. 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This leads to a reduction in wages being paid and a sustained drop in price levels which theoretically forestalls an inflationary spiral.</p><p style="text-align:justify">Raising rates is the first tool for monetary intervention as it is the quickest way to drain excess liquidity in the market. When interest rates go up, real rates also rise, leading to the burden on the borrower increasing in real terms.</p><p style="text-align:justify">Banks operate using a fractional reserve banking system wherein an initial amount of deposit grows multifold due to loans issued using the deposit. However, when rates are raised, this system of monetary expansion works in the opposite manner, contracting exponentially when debt is paid off or defaulted.</p><p style="text-align:justify">Moreover, new loans are more expensive, and therefore, new borrowing slows down, decreasing inflationary pressures regardless of debt defaults or settlements. Another critical facet is the correction of asset prices. Interest rates act as gravity to stock prices. The main reason why stock prices drop when rates rise is due to lower consumption and, therefore, a nominal decline in profit.</p><p style="text-align:justify">Please <a href="https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true" title="https://www.thehindu.com/business/Economy/rationale-behind-raising-interest-rates/article65960316.ece?homepage=true">click here</a> to read more. </p>' $lang = 'English' $SITE_URL = 'https://im4change.in/' $site_title = 'im4change' $adminprix = 'admin'
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Rationale behind raising interest rates -Sashwath Swaminathan nd Anand Srinivasan |
-The Hindu A critical facet of the consequences of an interest rate increase is the correction of asset prices. Interest rates act as gravity to stock market prices The Federal Reserve and other central banks around the world have raised interest rates to curb inflation. The rationale behind raising interest rates is that the cost of borrowing rises whenever they are raised, and the incentive to save and invest rather than consume increases due to better yields. It becomes more expensive to consume rather than save for the future as interest rates are higher. Therefore, the demand for goods reduces, leading to a drop in their prices. This leads to a reduction in wages being paid and a sustained drop in price levels which theoretically forestalls an inflationary spiral. Raising rates is the first tool for monetary intervention as it is the quickest way to drain excess liquidity in the market. When interest rates go up, real rates also rise, leading to the burden on the borrower increasing in real terms. Banks operate using a fractional reserve banking system wherein an initial amount of deposit grows multifold due to loans issued using the deposit. However, when rates are raised, this system of monetary expansion works in the opposite manner, contracting exponentially when debt is paid off or defaulted. Moreover, new loans are more expensive, and therefore, new borrowing slows down, decreasing inflationary pressures regardless of debt defaults or settlements. Another critical facet is the correction of asset prices. Interest rates act as gravity to stock prices. The main reason why stock prices drop when rates rise is due to lower consumption and, therefore, a nominal decline in profit. Please click here to read more. |