In the United States, 95% of mortgages are 30-year fixed rate, and mortgage debt makes up a smaller share of household debt for lower-income groups, which means that lower-income groups are more vulnerable to Fed hikes and interest rates staying higher for longer, see chart below.
In the United States, 73 million people receive social security benefits, see the first chart below.
Social security spending and Medicare and healthcare spending make up half of the total $6.75 trillion in federal spending, see the second chart below.
In addition, for the fiscal year 2024, the government spent more money on debt servicing costs than on Medicare and on defense, see again the second chart.
Only 24% of homes purchased at the moment are bought by first-time homebuyers. This is the lowest level on record, see chart below.
Sometimes, FOMC members think the risk to their inflation forecast is to the upside, and sometimes, they think the risk to their inflation forecast is to the downside, see the first chart below.
This is in sharp contrast to their views on the risks to the unemployment rate.
The number of FOMC members who think the risk to their forecast for the unemployment rate is weighted to the upside is always much higher than the number of FOMC members who think the risk to their unemployment rate forecast is to the downside, see the second chart.
In other words, the Fed has a very asymmetric view on its dual mandate, putting much more weight on low unemployment than on getting inflation to stay at 2%.
