The fed respond to inflation *AND* unemployment rate, and they respond to their own forecasts of those things.
The fed didn't stimulate inflation by choice. The rates were at 0 for most of the decade and inflation was very low.
Increasing interest rates was a response to inflation -- partially created by QE and stimulus spending, supply chain disruptions, and other supply/demand shifts.
As for how interest rates work: they make borrowing more expensive. There's a bunch of second-order effects from that but borrowing cost and time value of money are the main thing to keep in mind.
The fed didn't stimulate inflation by choice. The rates were at 0 for most of the decade and inflation was very low.
Increasing interest rates was a response to inflation -- partially created by QE and stimulus spending, supply chain disruptions, and other supply/demand shifts.
As for how interest rates work: they make borrowing more expensive. There's a bunch of second-order effects from that but borrowing cost and time value of money are the main thing to keep in mind.