The Federal Reserve is the US central bank.
The Fed's mandate is to control "monetary policy." It lowers interest rates to stimulate the economy. It then raises rates to destroy money after too much is issued.
Lowering rates: quantitative easing
Raising rates: quantitative tightening
Monetary policy is subjective and based on the opinions of a small group of people who don't know everything.
New money is issued whenever someone takes a loan. For example, if you bought a house using a mortgage, you are getting freshly issued money to spend on that house. Monetary policy determines the cost of borrowing that money.
When done incorrectly, quantitative easing can lead to too much money being issued and almost always leads to people overleveraging themselves. This is human nature. People are greedy. The money is being given away almost for free, so why wouldn't they take advantage? When rates are low, more people borrow money.
Quantitative tightening can lead to defaults and bankruptcies on those same debts - THIS IS INTENTIONAL. The goal is to destroy money during periods of QT. Raising rates means borrowing money becomes more expensive. When rates are high, fewer people borrow new money, and people who have already borrowed it can no longer pay back their debts.
The Federal Reserve reacts with higher rates AFTER too many people have borrowed money at low rates. Then, it reacts again after too many people can't afford higher interest rates and stop borrowing by lowering rates again.
If rates stay too low for too long, too many people will borrow money, increasing the demand for goods. The chair of the Federal Reserve said that they "flooded the market with money" during the pandemic. THIS IS WHAT CAUSES MONETARY INFLATION.
More money in the economy leads to higher prices because printing money does not immediately increase the supply of goods and services. This means consumers are fighting for the same supply of goods with MORE MONEY. Demand for goods increases. Prices rise.
Raising rates means some borrowers can't afford to pay back the money they borrowed. When they default, the loan is written off. The money *evaporates.*
Today, we are in the quantitative tightening part of the cycle. In the last 2 years, interest rates went from 0.25% to 5.5%. If you got a variable-rate mortgage when rates were low, your payment would have doubled (or even almost tripled in some cases!).
The goal of the Fed is to ensure that inflation stays at low levels so it can continue to print money forever.
Instead of issuing less money, the current system (and the Fed) is designed to issue boatloads of money, then raise rates to punish anyone who borrowed that money. Raising rates forces them into bankruptcy when they can't afford their payments, and the money supply is now back to where it is no longer leading to high inflation.
This cycle of easing and tightening repeats itself over and over again. Every cycle, more "average" people lose their possessions. Those possessions are bought up by people who understand how the cycles work.
These cycles are intentionally created to transfer wealth from people who don't understand the system to those who do. If this isn't corrupt, I don't know what is!