Hurricane Katrina has taken its toll on very many prospects of the economy. It has raised many fears in the United States, and other surrounding countries. Inflation is one of these very fears. Inflation is a persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services. Inflation has big effects on many things, including the Federal Reserve’s decisions on the interest rate policy. Seeing as rising interest rates have a down-most affect on consumer spending and investment in the Stock Market, people have been very sluggish in spending money and investment. The Federal Reserve policymakers are going to have a very big problem in the upcoming months. Not only are they most definitely going to have to make increases on interest rates, but they are going to have to figure out a way to persuade consumers to start spending money again, the way it should be and usually is. The policymakers have stated that Katrina has added to......

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