The fed sets the risk free rate. The risk free rate is an input to many other capital allocation decisions across the economy. When the risk free rate is low, you can keep an unprofitable business spinning for far longer. When its higher, conditions are tighter, and you have to run a leaner business to survive.

Consider the fed funds rate as the difficulty setting for business. Dialing it down is easy mode. Dialing it up is hard mode. When the difficulty gets dialed up, we inevitably discover that people that were believed to be smart businessmen and women were actually incompetent all along.

> Fed-decision this week cascaded in the wiping out of trillions of equity. Can somebody please explain how they are propping up the capital class, or how they are preventing market corrections?

Their decisions this week were to raise the rates, although they were actually a bit more dovish than expected, which is why the market rose on that day.

The way people consider the fed to be propping up the market is that, in the recent past, the fed has responded to market corrections by lowering interest rates and/or increasing QE. Both of which serve to prop up asset prices.

The behavior of the Fed at this very moment though is to raise rates, which is not propping up the market. The author of this post though is arguing that they should have raised rates even more, and the fact that they didn't is a gift to capital owners.