Monetary Policy

* Inflation is a general rise in prices for goods and services due to a decline in a currency’s value or purchasing power.[103] [104] [105]

* Inflation occurs when a government creates and puts more into circulation than its economy needs. This causes the purchasing power of money to shrink and prices to increase.[106] [107]

* Market forces can also have inflationary effects:

“Cost–push” inflation occurs when a supply shortage or unexpected cost increase pushes up general prices. For example, a spike in gas prices increases the cost of transportation, which causes higher prices in a wide range of products.
“Demand–pull” inflation occurs when sudden increased demand for products exceeds supply and pulls up general prices. An extended stock market rally is one example.[108]