The president of the United States does not control interest rates. Higher interest rates lead to higher mortgage rates and hurt home buyers. Higher interest rates drive up rents, transportation costs, and the price of durable goods which adds to inflation. When we have inflation the Federal Reserve raises rates.
What caused the inflation we have today? The pandemic of course.
Let’s get this out of the way first. The Federal Reserve sets interest rates in the U.S. This is a true fact.
The Federal Reserve is run by 7 members, or “governors” serving staggered 14-year terms, who are nominated by the President of the United States and confirmed in their positions by the U.S. Senate. The Federal Reserve is non-partisan. I wouldn’t mind seeing that changed.
Now let’s look at who benefits when interest rates are high. Banks, insurance companies, brokerage firms, money managers, Health Care companies, bond buyers, and money savers. Bank of America, J.P.Morgan Chase, and Goldman Sachs to name just three see an increase in stock value when rates go up. (Think about this the next time you get a huge bill for medical care)
The wealthy do no suffer when rates go up. They simply adjust portfolios and change investment strategies.
Our wealthy overlords and all those old white men who are in charge of just about everything grow wealthier each day while the largest part of the population struggles.
America’s 806 Billionaires Are Now Richer Than Half the Population Combined—a Lot Richer. Their combined wealth has doubled since 2017.
