Here's how higher interest rates may affect consumers

I have been puzzled by the aggressive moves of the Federal Reserve, which it says are designed to curb the rampant inflation we see evidence of each time we walk into a supermarket and buy a staple, not even a luxury item. It has also hit restaurants. Lunches which not all that long ago would cost $9 for a tuna salad sandwich and $1.50 for a Sprite now cost $13 for the sandwich and $2.50 for the Sprite.

So, what is the economic theory, if there is one, behind rapidly rising interest rates? Is it just a political band-aid to keep the Biden administration and the Democratic Congress in office by being able to say they are doing something? The Dems will say they have nothing to do with Fed policy. That is supposed to be correct. But, if they are not relying on the Fed, then, clearly, they are doing nothing.

The Nov. 5 edition of USA Today contained a piece by Elisabeth Buchwald and Paul Davidson which asks the question: "Fed rate hikes: What will and won't become more affordable?"

Their answers are interesting. They predict higher interest rates may help lower the price of appliances and furniture. Shoppers may decide to turn to cheaper models or just not buy. The price of homes, which has skyrocketed many places including the Tri-Cities, will supposedly decline because higher interest rates are a major disincentive to home purchasers. The USA article notes that raising the 30-year mortgage rate from 3.2% to 6% increases the monthly payment on a $312,000 mortgage by almost $500.

The authors claim rent should go down. Supposedly, if rental rates are based on the renter's income, and incomes decrease, rental rates should decrease. That does not seem to be happening around here. Instead, Kingsport, which went for at least a quarter-century without a new apartment complex and which has now had several constructed within the past five years, seems to be having rent increases.

The authors also claim airfares and hotel room rates should decline. But the FAA just put down requirements to provide flight crews an extra hour of downtime. That will not affect airfares positively, or so it would seem. Hotel rooms are out of sight in many areas. Two places I frequent, Nashville and Chapel Hill, North Carolina, have become ridiculous.

What other prices would not be lowered by rising interest rates? First and foremost, some product prices have risen because of the COVID stimulus checks and enhanced unemployment benefits. People spent more and prices went up. New vehicle prices have flown the coop and apparently will continue upward. The cost of energy will rise.

Food is where the consumer is currently being pummeled. The authors claim raising interest rates will have a minimal effect on food prices. Farmers are really pinched. The cost of fertilizer, diesel fuel and everything else it takes to produce food will not be affected in a positive way for consumers. The cost of that box of Cheerios will continue to rise even though wages will not keep up.

Gasoline prices will not be decreased by interest rate hikes, so two of the primary items consumers must have, food and gasoline/diesel, will not come down very much. Of course, the price of oil is determined by the sheiks, not by supply and demand. They have to continue to fund Greg Norman, LIV Golf, and cater to Putin.

I had no idea circumcision had become yet another social issue. This past Tuesday, there were people, dressed in all white, except for a red crotch, demonstrating against circumcision at the intersection of Eastman Road and Fort Henry Drive. They were carrying signs such as "Your penis does not belong to your mother" or something to that effect.

Obviously, the Jewish religion utilizes the practice, and, according to two of my contacts in the local ministry, it is safe to assume that Jesus was circumcised.

Is there no end to such protests?

Must we fight about every health-related matter? Has the BS surrounding COVID-19 shots not worn people out?