Secret #65 – The Fed Happily Destabilizes Family Wealth to Stabilize Wall Street

When the Fed wants to pump up the economy it lowers interest rates which increases the demand to buy houses more than the demand for most any other product.

Housing prices can skyrocket as we’ve seen in recent years but the Fed doesn’t care because skyrocketing house prices help the Fed reach their maximum-employment mandate and higher house prices don’t affect their stable-prices mandate because the Fed doesn’t include house prices when they calculate price inflation. 

When the Fed wants to slow the economy it raises interest rates which reduces the demand to buy houses more than the demand for most any other product. 

Home equity is the largest part of Americans’ wealth and the Fed happily destabilizes family wealth in order to stabilize stock market wealth. The Fed destabilizes Oak Street to stabilize Wall Street.

The Fed manipulates households to stabilize the stock market instead of the other way around.