Is inflation transitory and how long will interest rates stay low?

Right now, interest rates (mortgages) are 3% and inflation is 5%.  This cannot last because those who lend are getting paid back with dollars that cannot buy as much as the dollars they lent.  If inflation stays at 5%, interest rates have to rise to compensate lenders, e.g., to 8%.

MarginalRevolution.com has an answer:

“I think the inflation will last two to three years, and it will be bad,” Cowen said. But really grim hyper-inflation à la Carter-era, he thinks is unlikely. It could only happen if the Federal Reserve decides it’s too risky to trim the sails of cheap money. “I’d put it at 20% chance that the Fed will think, ‘Trump might run again, and we don’t want Biden to lose . . . history’s in our hands, so we’ll wait to tighten.’ And then it just goes on, and then it’s very bad.”

But a recession is also bad. It’s hard to sort it all out. “As the saying goes, ‘If you’re not confused, you don’t know what’s going on,’” Cowen told me.