This study sought to determine whether raising interest rates can effectively address the inflation problem in Egypt without causing a recession. This was done using structural equation modeling (SEM) over the period (1991-2024) to evaluate the direct and indirect effects of monetary policy on inflation and economic growth. The results showed that a 1% increase in the interest rate on deposits at central banks leads to an increase in lending rates by 0.73%, liquidity by 16.4%, and asset prices by 11.7%, but reduces private sector credit by -0.98%. Higher lending rates significantly reduce inflation by -3.4%, supporting the Keynesian theory, while higher asset prices slightly boost inflation by 0.045%. Asset prices and private credit positively affect GDP growth. The model demonstrates strong explanatory power (R² = 0.983), which confirms the effectiveness of raising interest rates in curbing inflation but highlights the need to set criteria to avoid deflation. Excessive credit, this study attempts to clarify a vision for achieving a balance between controlling inflation and growth through targeted monetary measures.