Why the Fed Keeps Denying Its Role in Increasing Inequality
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Why the Fed Keeps Denying Its Role in Increasing Inequality
The Federal Reserve expects low inflation, says rates will stay close to zero through 2022 and keeps lying about the role of central banks in increasing inequality.
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This episode is sponsored by Bitstamp and Ciphertrace.
Today on the Brief:
- Three Arrows holds more than 6% of Grayscale Bitcoin Trust
- New platform for censorship-resistant blogging
- Coinbase announces new token potentials as anti-surveillance hodlers flood out
Today’s main topic: The Fed’s inequality problem
Some key takeaways from yesterday’s Federal Open Markets Committee meeting:
- Interest rates are likely to stay near zero through 2022
- Unemployment anticipated to average between 9% and 10% during last three months of 2020
- Economy expected to contract 4% to 10% this year
- No specific discussion of yield curve control
- Inflation expected to be 1.0% this year and 1.5% in 2021, lower than Fed target of 2%
- According to Chairman Powell, inequality has nothing to do with Fed policy
On this episode, NLW recaps the above and dives deeper on two of the points:
- Net inflation stats gloss over specifics, including food prices that have been rising at an annual rate of 17.5%
- The Fed’s pronounced role in exacerbating inequality by propping up artificially high asset prices, effectively locking low and middle income households out of the mechanism for economic advancement
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