Lower lending rates lead to lower investment capital costs, allowing manufacturers to invest in new production and increase supply, lowering product prices and countering inflation. However, if the Fed raises rates, manufacturers may decrease production and cause inflation as manufacturing levels are correlated with consumer price increases. Interest rates are thus multicollinearly linked to consumer price inflation, manufacturing output, and availability of affordable investment capital.

1. 2/21/17, 7:31 PMSDR Lending Rates = Inflation Risk | Alan Dixon ~ PathosCrescendo | Pulse | LinkedIn
Page 1 of 2https://www.linkedin.com/pulse/sdr-lending-rates-inflation-risk-alan-dixon-pathoscrescendo
SDR Lending Rates = Inflation Risk
Published on August 23, 2016
Lower lending rates equal on a business point reduction scale lesser SDR Bond
Sales values when acquiring investment capital.
Hence when investment capital is available at lower rates we thus are able to invest in
new manufactures of a specific sector or sectors that of which lowers the cost of
products within that specific sector set of sectors, due to greater supply of products
within each sector.
Therefore, countering inflation with lower lending rates via way of reducing the lending
rate translates into greater PMI via more affordable investment capital resources,
That is if the manufactures increase production with the new investment capital.
Thusmore,
Lower Lending Levels =
Affordable Investment Capital Resources
= Higher Manufacturing Potential or PPE or PPF
Thus as the Fed gov increases rates the risk is that PMI manufactures will lower
manufacturing levels and cause inflation as structured on PMI Correlation to rising CPI.
Hence the multicollinearity factor of interest rates to CPI to PMI to Investment Capital
Lending.
~Pathos Crescendo
Tagged in: interest rate risk management, capital markets, actuarial science
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Alan Dixon ~ PathosCrescendo
Independent Marketing Director DECA Inc, VUBS LLC, W…
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2. 2/21/17, 7:31 PMSDR Lending Rates = Inflation Risk | Alan Dixon ~ PathosCrescendo | Pulse | LinkedIn
Page 2 of 2https://www.linkedin.com/pulse/sdr-lending-rates-inflation-risk-alan-dixon-pathoscrescendo
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