According to recent reports, inflation for the year is at 7.7% compared to its 2% pre-pandemic norm, and the Federal Reserve has increased interest rates from nearly zero earlier this year to almost 4% in an effort to bring prices back down. In the lead-up to the holidays, that ongoing economic pressure has been impacting some Americans more than others.

"While higher interest rates, slower growth and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses," Fed Chair Jerome Powell said in August. "These are the unfortunate costs of reducing inflation."

The Fed's interest rate bumps are meant to discourage borrowing in order to tamp down on consumer spending, but that hasn't happened, and prices are still high. While well-off Americans can afford to dip into their savings or take on fee-based platinum and gold cards to make up the difference, low-income families are being forced to turn to high-interest credit to make ends meet.

"Many consumers this year have relied on borrowing or dipping into their savings to manage their weekly budgets," said Target (TGT  ) CEO Brian Cornell on a November 16 earnings call. "But for many consumers, those options are starting to run out. As a result, our guests are exhibiting increasing price sensitivity, becoming more focused on and responsive to promotions and more hesitant to purchase at full price."

During the pandemic, most Americans accumulated savings thanks to wage increases and government refunds, but the top 50% of earners hold nearly four times as much in pandemic savings compared to the bottom half, according to Fed estimates. Borrowing has increased across the board, but higher-income areas are still borrowing less than they were before the pandemic.

"A lot of [low-income] households are moving toward the greater fragility that was the norm before the pandemic," said the chief U.S. economist at Deutsche Bank (DB  ), Matthew Luzzetti.

This means high rates are punishing low earners while well-off Americans can come up virtually unscathed, something that was highlighted in the differences in spending this past holiday weekend. While the makers of luxury champagne Moet Hennessy (LVMUY  ) were running out of stock to sell due to high demand, food banks and other charities have been facing a similar problem.

"With the cost of food, the explosive cost of eggs, people are having to come to us more," Beth Chambers, vice president of basic needs at Catholic Charities Boston, told The New York Times. "Before the pandemic, we thought in cases. Now we think only in pallets."

Chambers says that the Boston food bank has had to close early on several occasions because it ran out of food to give to people in need. On Thanksgiving, The Times reports that patrons began to line up outside the food bank at 4:30 a.m. for free turkeys, more than four hours before the facility opened.

It's clear that the Fed's interest rate bumps are having an effect on low-income families, but analysts aren't sure that will be enough to bring down prices.