And doesn't the price of assets increase in lockstep with inflation? Those holding cash and bonds are the ones getting pinched during inflation.
According to this article [0], the Fed controls two of the three most important interest rates in the U.S. But if you look at their chart, all three rates have followed each other very closely since 2000. Although the Fed doesn't control the prime rate it seems that the prime rate doesn't deviate from what the Fed is doing very much.
[0] https://www.thebalance.com/what-interest-rates-does-the-fede...
> If inflation (as measured by the Fed) increases and the Fed wants to lower it, they can decide to raise interest rates but it doesn't happen automatically.
That's what I meant.