What will eventually happen to the interest rate when higher inflation is expected in the future?

Question

What will eventually happen to the interest rate when higher inflation is expected in the future?

Answer 1

According to the fisher effect, the interest rate adjusts 1 for 1 with the inflation rate.  So, if the interest rate was 5 when inflation was 3, it would be 7 if inflation was 5.

Answer 2

More people will save, and since there is now less demand for money, interest rates will go down due to the decreased demand, which is quite the opposite of what people expect to happen in a period of higher inflation (you would think that borrowing money would be more expensive since interest rates will rise due to people needing more money to cope with the increase in prices).