> "Corporations are people, my friend. Of course they are. Everything corporations earn ultimately goes to people. Where do you think it goes? Whose pockets? Whose pockets? People's pockets. Human beings, my friend."

- US Presidential candidate, Mitt Romney, 2011

Don't corporate profits depend on the 99% (the poors) spending? If the consumers fail, and stop spending, how long before the corporations feel mildly inconvenienced?

Could you point to some evidence that we are not? Or at least an anecdote or an opinion on what the issue is or anything at all of substance rather than a provocative question and a bit of snark? What am I supposed to take away from this- I don't even know whether 'we' refers to the consumer or participants in the labor market

> Would not lower rates mean more consumer spending

> the feeling that the federal reserve is here for the wealthy

In a sense, the disconnect between these two things is also the explanation. The behavior of consumers is not directly coupled to the fed rate. What you or I do with our money won't change if the rate goes up or down a percent, because we just don't have enough money for it to make a difference to our daily life.

But it often takes a loan to start a business. And when the bank is considering who to make loans to, higher fed rates mean they need to charge more interest, which means riskier business proposals don't get funded. Conversely, if the fed rate is low, then the only way for banks to make money is by making loans, so there's more money available, which tends to both increase inflation and decrease unemployment.

The fed has two jobs (keep inflation at ~2%, and unemployment no higher than 5%) and one lever to accomplish both. It's not so much that they only care about the wealthy, but rather that their only tool needs to percolate through the wealthy before it affects us.

Inflation is bad, we have high inflation due to the energy crisis, the treatment for high inflation is increasing interest rates.

> I can't help but shake the feeling that the federal reserve is here for the wealthy, the bankers, and not for the rest of us, and anything they do is ultimately not for our benefit, but for theirs.

Because that is what's happening. Our economy is fractured after years of catering to the wealthy at the expense of the working class (anyone who finances their life via their labor.)

The problem is interest rates are the only large lever they have, but changing this lever changes a lot of things at the same time. Some of those changes are good, other bad - they need to figure out the best compromise, but there is always good and bad with every position of this lever. Most of the things that happen as a result of the lever (including leaving it in the same place) take time - sometimes years - to work out.

Lower rates does increase spending. However it does this by adding money: inflation - which in turns makes prices go up. So in the long run this makes things worse despite the short term gain. This is just one part of the full consideration, there are lots of other effects from any interest rate that they need to work out.

I think you've got the cause and effect backwards.

If X dollars buys 1.2 times more stuff in the future (deflation) you will hoard your dollars and deprive the economy of them.

If X dollars buys 0.8 times more stuff in the future (inflation) you will buy things now and make investments.

The Fed isn't optimizing for people wanting mortgages today, it does controlled burns to try and prevent medium-term calamity. Look up the Volker shock, where rates were hiked beyond 20% to trigger recessions because inflation was above 10%.

> Rates up, rates down, I'm so confused.

You're making a lot of strong assertions for someone who acknowledges they don't understand pretty basic concepts in macroeconomics.

> Would not lower rates mean more consumer spending, thereby injecting more spending and fluidity in the system?

If managing the economics of a country was as simple as recognizing a relationship like, "when we move this number up, then things get better," then we'd be living in a utopia.

If you want to assert that the Fed isn't helping the average citizen, then go ahead and join the large group of people who have been suggesting this the whole time. But if your basis for such an assertion is that you can't comprehend why a decision like raising or lowering interest rates isn't simple, then do yourself a favor and just step away from even trying to understand what is happening here.

> I can't help but shake the feeling that the federal reserve is here for the wealthy, the bankers, and not for the rest of us

Kashkari was part of the minority opinion. The Fed voted to keep rates steady, so I guess that means that the Fed is against the wealthy, bankers, and for the rest us?

It turns out that having lots of money is useful, including at taking advantage of the macroeconomic landscape. In a high interest rate environment, you get free money from yields. In a low interest rate environment, you get free money from leverage.

The Federal Reserve is one of the last competent parts of government. You don't blame the ER doctor for atrophy caused by being hooked to a ventilator after getting a heart attack caused by consuming only fast food. The ER's job is to keep the patient alive by making sure that oxygen is circulating well enough for the body alive. Likewise, the Federal Reserve's job is to make sure that money circulates in a way that keeps the economy alive. It's not their fault if the voters vote for politicians who enact terrible policy.

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US Treasury just bought about $10 billion worth of Yen

What happens next is that US Treasury yields go to the moon, making previously bought treasuries nearly worthless. Most bank deposits in the US are instantly used to buy treasuries, so severe devaluation of those less-than-mature bonds on the secondary markets means that money held by banks is not really there. Should there be a larger than average number of people making withdrawals, bonds would be dumped on the secondary for pennies on the dollar. Bank runs, complete financial collapse, etc. Enjoy.

BTW, this is exactly what happened to Silicon Valley Bank in 2023 on a smaller scale.

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The problem for mortgages is that the headline rate (30 year fixed) was historically low for almost the entire period 2009-2020, as the economy slowly struggled out of the Great Recession and then the rates went absurdly low during the Covid recession. That meant that a lot of people locked in mortgage rates that are impossibly low (including me) and going back to more "normal" rates- the current rates are a little lower than what was available in the period 1993-2008- feels high to people. And so many people locked in those low rates (either purchase or re-fi), can't get those low rates on a new house, and so feel locked into their current home, which is serving as an anchor on the entire real estate market.

But you can see this pattern here in FRED: https://fred.stlouisfed.org/series/MORTGAGE30US

In comparison to what? Buyers usually want this to be lower. Historically quite low still.

My parents bought their house when rates were about 12-14%... "High" is relative.