William D. Cohan had a bizarre opinion piece in the Sunday Post claiming that the Fed's low interest rate policy was hurting savers and helping hedge funds. The gist of the story is that low interest rates hurt small savers with bank deposits while they make it easier for hedge funds to borrow money to speculate. Both sides seem more than a bit off the mark.

On the small savers story, it's not clear how much anyone could be hurt. It's not clear what interest rate Cohan would expect the Fed to run in a badly depressed economy (he complains about an "artificially" low rate, which seems to imply that there is a natural rate out there somewhere), but let's assume that 2 percent would be Cohan's preferred rate. If a saver has $40,000 in the bank (this would put them way above the bulk of the population in terms of their holdings of financial assets), Bernanke's zero interest policy is costing them $800 a year. That's not trivial, but hardly a disaster either.

Even this loss assumes that all of their savings are in short term deposits. If they hold long-term bonds they have seen their price soar, at least in part because of Bernanke's policy. Also the low interest rate policy has almost certainly given a boost to the stock market as well.

On the hedge fund side, investors have benefited from lower interest rates, but this is hardly necessary for them to profit. Hedge funds made plenty of money in the higher interest rate environment of 2006-2007 as well as the late 90s. The zero interest rate policy is certainly not necessary for them to earn hefty profits.

The biggest gainers from the low interest rate policy are probably the millions of homeowners who have been able to refinance at interest rates that are 1-2 percentage points lower than their previous mortgage. A 1.5 percentage point drop in interest rates on a $200,000 mortgage would save a homeowner $3,000 a year in interest payments. For this reason it is very difficult to see Bernanke's low interest rate policy as one designed to primarily benefit the wealthy.