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Federal Financial Analytics managing partner Karen Petrou has on a selective basis agreed to serve as an expert witness in litigation germane to matters such as director-and-officer liability related to regulatory requirements, the manner in which financial institutions are resolved, and the role forward-looking regulatory planning plays in M&A transactions, contractual matters, and related corporate actions.
Engine of Inequality, by Karen Petrou
The first book to reveal how the Federal Reserve holds the key to making us more economically equal, written by an author with unparalleled expertise in the real world of financial policy.
Following the 2008 financial crisis, the Federal Reserve’s monetary policy placed much greater focus on stabilizing the market than on helping struggling Americans. As a result, the richest Americans got a lot richer while the middle class shrank and economic and wealth inequality skyrocketed. In Engine of Inequality, Karen Petrou offers pragmatic solutions for creating more inclusive monetary policy and equality-enhancing financial regulation as quickly and painlessly as possible.
“Petrou’s book uncovers a hidden engine of our skyrocketing inequality: financial-policy. In an accessible and engaging prose, Petrou takes us through the inner workings of monetary policy at the Fed and financial regulations, how they’ve made inequality worse and how they could instead be retooled to take us to a more equitable future. A novel look at the problem of inequality and bold ideas to help resolve it. A must read.”—Emmanuel Saez, Professor of Economics at the University of California Berkeley and author of The Triumph of Injustice
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Federal Financial Analytics (FedFin) is a Washington-based financial services-consulting firm that has for decades attracted a high-powered clientele in Washington, on Wall Street, and among global central bankers. Since 1985 FedFin has provided a unique blend of analysis and strategic advice on public policy, regulatory, and legislative issues for industry and governmental clients doing business in the U.S. and abroad.
A proprietary think-tank for its clients, FedFin reviews critical federal and global policy developments in banking, insurance, asset management, and mortgage finance, analyzes them in great depth, and then advises clients on whether what they want can be made to work for them, within the policy environment and for the financial system. It is FedFin’s guiding principle to be an honest broker, and clients depend on the fact that the firm does not offer lobbying or any other services that could compromise its objectivity and independence.
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In the News
The International Economy, September 2025 Issue
The Fed’s New “Gain-of-Function” Monetary Policy By Scott Bessent Overuse of nonstandard policies, mission creep, and institutional bloat are threatening the central bank’s monetary independence....In her book Engine of Inequality: The Fed and the Future of Wealth in America (2021), progressive financial policy expert Karen Petrou documents how the Fed’s [...]
Wall Street Journal, Friday, September 5, 2025
The Fed's 'Gain of Function' Monetary Policy By Scott Bessent As we saw during the Covid pandemic, lab-created experiments can wreak havoc when they escape their confines. Once released, they can’t easily be put back. The “extraordinary” monetary-policy tools unleashed after the 2008 financial crisis have similarly transformed the Federal [...]
Politico, Friday, August 29, 2025
Trump wants to shake up the Fed. Stephen Miran has a playbook By Sam Sutton White House economic adviser Stephen Miran is one of Donald Trump’s chief strategists for scaling back the Federal Reserve’s autonomy. The president is giving him a shot at disrupting the central bank from the inside. [...]
Issues in Focus
The Vault
Karen Petrou: What Treasury Wants from the Fed and Why It Should Get it
With all the bandwidth absorbed by the Miran and Cook dramas, insufficient attention was paid late last week to Secretary Bessent’s Wall Street Journal article laying out a new monetary-policy model. I like it a lot and not just because Mr. Bessent quotes my book. As he says, we need a different monetary policy model, one that the Fed is clearly unable to develop on its own judging by the [...]
Karen Petrou: How to Redesign the Federal Reserve Banks
“U.S. President Donald Trump’s radical shift in economic approach has already begun to change norms, behaviors, and institutions globally. Like a major earthquake, it has given rise to new features in the landscape and rendered many existing economic structures unusable,” or so says Adam Posen at the Peterson Institute. After last week, it looks as if the Federal Reserve as it came to be known over recent decades is also [...]
Karen Petrou: The GSEs’ Guarantee Gauntlet
The Wall Street Journal last week described Bill Pulte’s recent mortgage-fraud allegations as ill-advised “political lawfare.” Thus it is, but it’s also an unfortunate distraction from a high-priority decision within Mr. Pulte’s legal remit: ending the GSEs’ conservatorship. If FHFA and the Administration do not tread carefully, they will do a lot of damage not just to the mortgage market, but also to the President’s mid-term hopes and long-term legacy. [...]