How the Fed’s fine intentions feed US wealth inequality
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Wealth inequality in the US has reached a record level since the beginning of the coronavirus outbreak, and the Federal Reserve is partially responsible, despite its efforts to boost job prospects for people on low incomes, according to analysts at UBS.
The Fed reacted quickly in 2020 to help cushion the US economy from the devastating effect of lockdowns. But its stimulus has also fired up the price of assets held by the wealthy.
UBS calculations based on Fed data show a ratio measuring individuals’ net assets against their liabilities has climbed dramatically for top earners, as their net worth has rocketed higher alongside a booming stock market.
The net worth of the top 1 per cent of people by income is now close to 26 times their liabilities. For the bottom 20 per cent, it is just over five times, making the difference…
