Think about it this way. You are trying to sell an apple. In one room, there are 100 people trying to sell an apples and 100 people trying to buy them. In the other room there is 1 person trying to buy apples and no one selling. In the first room you don't have much leverage. The buyers can go to the other 99 sellers if they don't like your price. In the second room you have a ton of leverage. If the person wants to buy an apple they are either going to have to buy it from you or wait for another seller to enter the room.

When it comes to non equity or delta 1 assets, there tends to be more complexity in understanding the assets, which acts as a barrier to entry. If you have been in investment banking for 6+ years, you likely understand these complexities and can find pricing inefficiencies.

The federal reserve rate is essentially how much the US pay's their debtors. Bank's use this as a benchmark for how much they lend to their own borrowers.

The inflation rate is a calculation done based on a basket of goods. if the price of that basket of goods goes up, inflation is up. if it goes down, inflation is down.

When the federal reserve lowers their rates, it makes it easier to get money, and therefore the price of the basket of goods goes up.

When they make their rates higher, money is harder to get, and the price of the basket of goods goes down. The only problem with this is that there is also less money for labor, which means that unemployment goes up. The Feds job is to balance these two things.