Did the Federal Reserve make economic inequality worse?
By David Brancaccio
In the post-2008 financial crisis economy, the Federal Reserve has received plenty of criticism for its quantitative easing approach, cited as one factor behind widening economic inequality in the U.S. Previous central bank chairs, past and present, have defended their policies and said their main goals do not necessarily include inequality reduction. Karen Petrou, co-founder of Federal Financial Analytics, believes that the central bank not only contributed to the growing inequality among Americans, but also that it has the ability to reverse that inequality through targeted policies that stay within its mandates of maximum employment, price stability and long-term moderate interest rates. Petrou’s new book, “Engine of Inequality: The Fed and the Future of Wealth in America,” explores those ideas. “Marketplace Morning Report” host David Brancaccio spoke to Petrou about her new book and what the Fed can realistically do right now to reverse the momentum of inequality. Below is an edited transcript of their conversation. Listen here.
