Fed chairman Jerome Powell has avoided the issue or completely denied the Fed’s involvement in growing economic inequality in the US, but San Francisco Fed President Mary Daly and other members of the Fed have been much more proactive.
Where it says: While Daly insists that the answer to whether the Fed has increased inequality is “not yes or no,” she admits it is an issue the Fed has been involved in and could do more to decrease it.
- “Many of us openly discuss this … and talk about the role we can potentially play in balancing asset distribution or access to assets,” Daly told Axios.
- “If we really want to address this, we can’t just say we don’t have the toolkit. We have to investigate what we can do.”
Why it matters: Inequality becomes a major concern for policy makers as more Americans become dissatisfied with the economy and the disjointed K-shape recovery takes place after the coronavirus pandemic outbreak.
What you do: Daly says that prior to the pandemic, the events of the San Francisco Fed, including the Fed Lists series, included discussions on how “monetary policy can be thought about in a way that supports those who are at the end of the income or wealth distribution stand or not as promoting inequality. “
- The Fed’s credit facility on Main Street and its support for the Paycheck Protection Program were “developments that emerge from this realization, if you will, that we are our lenders of last resort in markets other than treasury , give the opportunity and have to use it. ” . “
The last word: “There is more work to be done, but I definitely want to go back to the characterization that we don’t think about it.”