u/Obsidian-Rough

If inflation is being driven by a supply side effect leading to increased prices in non-discretionary goods, why do central banks raise rates to further limit discretionary spending? Is the effect the bank is looking for already being achieved by the consumer having to allocate more of their budget to non-discretionary goods and if so why double down here?

My assumption is to move CPI faster but then there is an assumed trade off that it may limit growth. Why not just let it play out?

Context: I am Australian and we have increased rates at one of the fastest rates globally this cycle.