Monetary policy influences inflation mainly by controlling the availability and cost of money in the economy. When money supply grows too quickly, demand may exceed supply, leading to rising prices. By tightening monetary conditions, authorities can reduce excessive demand and ease inflationary pressures. Conversely, during low inflation or weak demand, easing policy can encourage spending and investment. Expectations also matter, as clear policy signals can shape how businesses and consumers plan for future prices. Over time, consistent monetary policy helps anchor inflation expectations and maintain stability.