Will the West Asia war spike prices and inflation or slow down growth and increase the unemployment rate? So why are central bankers not raising interest rates now when anyone can see how fast rising energy prices will fuel inflation? Raising interest rates in such a situation can worsen the slide and tip over an economy into recession. So here the essential problem before policymakers: Raising interest rates may arrest inflation but doing so also involves killing demand. On the other hand, cutting interest rates (as President Trump has again demanded yet again), risks fuelling inflation.

Source: Indian Express March 20, 2026 09:53 UTC