Is There a Relationship Between Inflation and Interest Rates?

A lot of investors believe there's an inherent relationship that is, inflation picks up, interest rates pick up. Is that how it works? Or is the interest rates picking up something that only happens when the central bank takes action to fight the inflation? Jim Boulden: I don't think there's one for one relationship between inflation and interest rates. When the fed is forced to be a little bit more aggressive on on monetary policy, then the bon market can run into trouble.