Impacts of Inflation on the Nominal Interest Rate

Nominal interest rate of a bond or loan = the stated interest rate.

Real interest rate = nominal interest - current or expected inflation.

If participants expect higher inflation, the net result will be higher nominal interest rates:
Lenders will be less willing to make loans or will demand higher nominal rates of interest in order to compensate for the perceived risk of inflation. Borrowers will seek more loanable funds in anticipation of higher prices.

Increases in the money supply will lead to higher price levels, unless there is a corresponding increase in real output.