Even so, "the effect of low interest rates falls disproportionately on those who save and who live off of savings," the study said. "Frugality is punished."
Thus it is clear: The Fed is picking winners (homebuyers and other borrowers) and losers (savers).
Earlier this month Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, spoke at the 19th annual West Virginia Economic Outlook Conference, presented by West Virginia University's College of Business and Economics at the Civic Center.
Lacker spends a lot of time thinking about the Fed's monetary policy. This year he is serving on the Federal Open Market Committee.
At a press conference following his presentation, Lacker was asked about the impact ultra-low rates are having on senior citizens and what investments he recommends for seniors to generate interest.
"We are well aware that low rates are squeezing incomes, particularly of the elderly," Lacker said. "We take that into account. We realize it is a hardship."
He did not offer investment advice.
Meanwhile, the Fed has said it plans to keep interest rates ultra-low through mid-2015.
Reach George Hohmann at busin...@dailymail.com or 304-348-4836.