If an economy is recovering from a recession and experiencing rising price levels, what is the likely underlying cause affecting real interest rates?

When an economy is recovering from a recession, people and businesses start spending more money, which increases demand for goods and services. This rising demand can lead to higher prices, known as inflation. As prices go up, lenders want to make sure they are compensated for the decrease in purchasing power over time, so they may raise real interest rates. Real interest rates are the rates after adjusting for inflation, and when they increase, it can make borrowing more expensive. For example, if someone wants to take out a loan to buy a house, higher real interest rates mean they will pay more in interest, which could slow down the recovery by making it harder for people to afford big purchases.