Decision to increase lending rates comes years too late

Luna Ruth

You’ve probably heard the lament that a farmer has locked the barn door after the horse has already left the barn. That’s how the affordable housing community looks at the Federal Reserve’s decision to finally increase lending rates.

The Fed should have done this years ago. Suppressing interest rates contributed more than any other factor to making starter homes unaffordable to working families in the lower-income categories. This is not as simple as it seems, so allow me a moment to explain.

The Federal Reserve Board controls the nation’s money supply. Investors who are looking to make money on the money they have are chasing opportunities with the most significant potential for gain. The Fed was guided by a belief that growth in the investment community would trickle down into other areas of the economy, but no such trickling occurred. Not even a drop.

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