Why? Because as the value of currency goes down, it becomes easier to pay off fixed debts. As a compensation, interest rates tend to rise with inflation, because the cost of money—if I give you a dollar today, I want more tomorrow—goes up with it.
The flipside is that creditors hate inflation. Raising interest rates kills inflation dead. In fact, raise interest rates at the wrong time, and you get deflation, which makes it harder to pay off debts.
This tells you everything to know about why the very, very rich want to raise interest rates right now, even though we have the lowest inflation rate in history. Paul Krugman fills in the lines:
Keynes describes...a condition of secular stagnation — of persistently low returns on investment, in which there is a chronic oversupply of saving. He believed, in 1936, that this would be the state of affairs in the decades ahead, and was of course wrong in that belief. But he wasn’t wrong about the possibility of such a state of affairs, and since Larry Summers came out as a secular stagnationist, the view that we may well be there now has gone mainstream.
[L]ow rates of interest, he suggested, "would mean the euthanasia of the rentier, and, consequently, the euthanasia of the cumulative oppressive power of the capitalist to exploit the scarcity-value of capital."
What Keynes didn’t say, but now seems obvious, is that the rentiers are unlikely to accept their euthanasia gracefully. And therein, I’d argue, lies the ultimate explanation of the persistent clamor for monetary tightening despite weak economies and low inflation. I’ve described on a number of occasions how tight-money advocates are constantly shifting their arguments — it’s about inflation; no, it’s about sound market functioning; no, it’s about financial stability — but always with the same bottom line: rates must rise now now now.
This is why don't we have higher employment, more growth, and rising standards of living right now. And yet mortgage rates are going up—in a housing slump. At some point, the bottom 99% are going to notice, don't you think?