The Fed’s “all in” approach does more for capitalists than capitalism
By Karen Petrou
Last week, Federal Reserve Board Chairman Jerome Powell stressed that the Fed’s recovery effort is a ”all in.” This is admirable, but unachievable unless the Fed redefines “all” to mean everyone. After 2010 and up to March of 2020, Federal Reserve monetary and regulatory policy helped to make the richest Americans even wealthier and resulting inequality even worse far faster than ever before. After last March, the Fed doubled down on its policy of ultra-low rates, a huge portfolio and ironclad safety nets beneath even the most speculative financial markets. Once fiscal stimulus runs its course, financial policy will make the inequality exacerbated first by the Fed and then the pandemic still worse, faster. This is a recipe for slow growth, increased financial risk and an even angrier electorate.