Daniel1985

Think about it like this (someone correct me if i am wrong)

The fed wants to decrease int rates when we are in an economic recession in order to increase increase lending/spending/agg dem etc. When we are in an economic recession inflation is decreasing. Therefore, when int rates decrease so does inflation.

The fed wants to increase int rates during an expansionary phase in order to decrease lending/spending etc. This is done to ensure that the US is not growing at an unsustainable out of control rate. When we are in an expansion, inflation is increasing. Therefore, when interest rates increase so does inflation.