Central banks are currently hiking interest rates to reduce aggregate demand. How is this reduction in spending distributed across the population? Specifically, what would be the shape of a graph of spending reduction vs income percentiles? (Also, would the curve differ qualitatively between countries?)
I am not sure if I understand the question. If you ask if interest hikes increase inequality, the answer is no.
It is not fully clear if there is any strong relationship between monetary policy and inequality, but if there is some relationship it is exactly opposite. Low interest rates make inequality worse$^1$. This is because low interest rates lead to higher asset prices which benefits primarily the rich. Low interest rates also lead to higher house values and rents making it more difficult for poorer people to get housing.
Berisha, E., Meszaros, J., & Olson, E. (2018). Income inequality, equities, household debt, and interest rates: Evidence from a century of data. Journal of International Money and Finance, 80, 1-14.
“About 10 per cent of the population are set to carry the greatest burden of getting inflation back down for the benefit of everyone else” according to the Australian national broadcaster.