When the Fed announces a rate hike of .25 on Wednesday afternoon it will be to protect the banks. Once again Mom and Pop entrepreneurs, first time home buyers, and parents helping out their kids with student loans will get screwed.

Fed Dogma says the economy is heating up and rates need to be increased to keep inflation under control. When demand out strips supply you have competition for goods and services. Higher prices can be charged and inflation results. However 37% of the adult workforce (age 16-64) is not participating and Capacity Utilization is at 78.1%; so human and plant resources are plentiful to accommodate demand. When efficiencies gained through technology in production, inventory management, and shipping are factored in the inflation argument becomes even weaker.

Now consider increased earnings and access to capital generated through the benefits of the Tax Cut and Jobs Act, responsible trade reform, and roll back of unproven EPA regulations. Collectively they provide established enterprises with abundant alternative financing options (non-bank) to fund capital expansion.

Unfortunately the Middle Class and those working hard to join it, only have access to the lending Monopoly controlled by the Fed.

Let’s not forget that each .25 point rate hike adds $55 Billion to the federal budget to finance a $21 Trillion deficit. So Mom and Pop get screwed twice. Having to pay more to banks for capital; and indirectly through taxes more to banks for financing the deficit.  I’m sure elected officials in Chicago, Cook County, and the State of Illinois are jealous they can’t get in on this racket.