Book Review: Why the Fed should reengineer its monetary policy
By Richard Herring
Richard Herring is Jacob Safra Professor of International Banking and Professor of Finance at the University of Pennsylvania’s Wharton School of Business
Since the financial crisis in 2008, the Federal Reserve has embarked on the most accommodative monetary policy in its history. Between low interest rates and quantitative easing — known as QE — the Fed has never done so much to encourage investment and lending for so long. Those policies are designed to lower unemployment and help ordinary Americans, but in her new book, “Engine of Inequality, The Fed and the Future of Wealth in America,” Federal Financial Analytics managing partner Karen Petrou argues the central bank is actually doing more harm than good. Petrou is justly renowned for her encyclopedic knowledge of financial regulations, having advised a wide range of corporate and institutional clients for decades on the impact of regulations on financial institutions and markets. Given that pedigree, one might be surprised that the subject of this passionate book is the growing economic inequality in the United States and what financial regulators should do about it….