Even though the FED has resolved to the uplifting of the economic situation in the current times, there are significant illustrations that show that it’s more into the present than the future. The measures adopted by the FED seem to affect the entire socially stratified groups in-country and the continents at large. The most recent adoption that is significant is the lowering of interest. Based on the provision within the article, lowered interest has turned into the increase of house prices by the majority of property owners. Furthermore, the reduced interest rates have affected the middle class rather than the top-and lower-class individuals in the country.
The 3% low interest laid affects the middle class grossly considering that house equity is the only major asset associated with the middle class. Thus, the take uplifts the economy since the middle class’s home and house construction industry is adjusted considering it is a more blue-collar job producer. However, deeper analysis in this case of the FED’s take illustrates that the economic aid and uplift being lifted is given to the middle-class people, who are less in need of it. The measures deteriorate economic equality. On the other hand, there are several principles that the FED has adopted. The economic principle seems only to target the upper class rather than that all the social classes. It seems to be causing more economic harm and inequality under cover of economic recovery since the great depression of 2007-2009 and the Covid 19 pandemic of 2019. The most elaborate issue is the case that the FED has resolved to the purchase of debt from firms that have laid-off workers.
This adoption is a take that seems to affect the low class in society. However, the distinct occurrence that seems invisible based on FED’s operations is that the moves are hurting the modest means of prudent savers. This aspect is by the insignificant reduction of the amount of income they will earn from the national treasury securities and no-risk investments like the bank certificates deposit. Each principle adopted by the FED seems to be uplifting only a portion of the economy rather than the entire economy as expected. The focus of the FED is majorly on the middle class as well as the higher class. However, on the side of the lower class, the FED has proved to be inconsiderate enough.
Another aspect that the FED has incorporated without focusing on the future is the concern of subsequent security earnings such as pensions. The benefit income has been erased by the low interests that the FED has levied in the prospection of lifting the economy from a period and state of crisis. The FED should focus on the fact that treasury bonds theoretically should provide overstocks. However, this is not considered. Despite the prospects of the FED and the good intentions associated with the FED, a huge problem seems to be laying up. A problem that will impact directly to the pension funds as well as the pension recipients. Insurance companies and cooperate employees will be victims of the huge problem associated with the adoptions made by the FED. Thus, there is a need to reconsider and re-evaluate the measures in place. The intention for economic uplift is necessary. However, the focus on the future is as well necessary.
References
https://www.federalreserve.gov/aboutthefed/structure-federal-reserve-banks.html
https://www.propublica.org/article/the-fed-saved-the-economy-but-is-threatening-trillions-of-dollars-worth-of-middle-class-retirement#:~:text=A%20Closer%20Look-,The%20Fed%20Saved%20the%20Economy%20but%20Is%20Threatening%20Trillions%20of,Social%20Security%20and%20pension%20funds.
Overview of the Federal Reserve System
https://www.federalreserve.gov/aboutthefed/payment-systems-video.htm
https://www.federalreserve.gov/aboutthefed/consumer-protections-community-development-video.htm
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