How do central bank interest rates influence inflation dynamics?

21 Eki 04:45

I'm trying to wrap my head around the relationship between interest rates set by central banks and the overall inflation trend. Specifically, how does raising or lowering the policy rate translate into price level changes in the economy? What are the main transmission mechanisms at play, and are there situations where the expected impact might be muted or reversed? Would love to hear your explanations and examples.