This paper reports on an empirical study of the effects of interest rates and inflation on aggregate consumption in the United States. Empirical evidence, based on quarterly U.S. data from the postwar period, is first presented in support of the hypothesis that the real rate of interest varies inversely with the rate of inflation, at least in the short run. Regression estimates of an aggregate consumption function for the United States, also based on quarterly data from the postwar period, are then presented. These estimates indicate that the propensity to consume varies inversely with interest rates and directly with the rate of inflation.