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My ‘Wealth Disparity Monitor’ of the Fed’s Money-Printer Era: Holy Moly. April Update of the Greatest Economic Injustice in Recent History

The wealthy got immensely wealthier. Everyone else paid for it via rampant inflation.

By Wolf Richter | 3 April 2022

WOLF STREET — The Fed’s own data on the distribution of wealth in the US is a quarterly report card on the Fed’s official policy goal of the “Wealth Effect.” It has now released the data for Q4. The Fed uses monetary policies, such as QE and interest rate repression, to create asset price inflation and make a relatively small number of large asset holders vastly wealthier so that they might spend more. This has been explained in numerous Fed papers, including by Janet Yellen back when she was still president of the San Francisco Fed.

The Fed’s wealth distribution data divides the US population into four groups by wealth: The “Top 1%,” the “Next 9%” (2% to 10%),” the “next 40%,” and the “bottom 50%.” My Wealth Effect Monitor divides this data by the number of households in each category, to obtain the average wealth per household in each category. Note the immense increase in the wealth for the 1% households after the Fed’s money-printing scheme and interest rate repression started in March 2020:

As you can see from the steep curve of the red line, the “Top 1%” households were the primary beneficiaries of the Fed’s policies since March 2020. These policies were designed to inflate asset prices, and only asset holders benefited from that. The more assets they held, the more they benefited. […]

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