Intuitively, if the Fed attempts to disinflate by raising the federal funds rate, the disinflationary effect will be felt not only through the usual output gap channel but also through a direct restraint on long-term inflation expectations.
Our focus on banks as the principal vehicle for financial inclusion also stems from the fact that only they can offer the entire suite of products that would facilitate meaningful financial inclusion. 9. Let me now turn to how Financial Inclusion can help the society and the economy.