First, higher interest rates dampen aggregate demand and thus employment. Second, the policy interest rate tails to address the underlying causes of inflationary pressures in many countries. Those pressures are often best dealt with through targeted fiscal policies in education,health care.and investment in strategic sectors, such as agriculture and infrastructure. The lens for identifying appropriate public investment projects and credit targets needs to be gendered and ethnically representative, underscoring the important role of affirmative action in private and public decision-making bodies.