Fisher Effect vs Quantity Theory of Money and how an increase in the money supply lowers interest rates? I was under the impression that in the long run, a larger money supply resulted in lower interest rates. According to the Quantity Theory of Money, see below figure, an increase in the money supply -> An increase in price levels.



Increasing price levels == increasing inflation rate.



Fisher Effect:

According to the Fisher Effect:

Nominal Interest Rates = Real Interest Rates + Inflation


Changes in the money supply should not affect the Real Interest Rate in the long term therefore there is a 1 for 1 increase in Nominal Interest Rates and Inflation in order to maintain the equation.

The Chart suggests that an Increase in money supply => Higher prices == Inflation, which i believed meant lower interest rates.

But the Fisher Effect seems to be suggesting the opposite, hence my confusion.

I would appreciate any help in clarifying this, thanks in advance.
ceteris paribus - other things staying the same

What happens with a changing money supply depends on what other things stay the same in your thought experiment. Possibilities might include: 


If real interest rates stay the same but you manage to increase the money supply and inflation, then nominal interest rates must rise by definition.  Historically, nominal interest rates have been higher in inflationary periods than in periods of price stability or deflation 
If nominal interest rates stay the same but you manage to increase the money supply and inflation, then real interest rates must fall by definition.  This is likely to lead to an inflationary spiral as people borrow cheaply in real terms, increasing demand and the money supply further and so pushing prices higher
If you force inflation to stay the same but you manage to increase the money supply excessively compared with that inflation, you may need other controls such as price regulation.  This could lead to shortages of goods or an asset price bubble, at which point things other than money become important while interest rates could become less relevant