WALL STREET Dem donors: "We'll sit out or back Trump if you nominate WARREN."

[Kid Berwyn]

25. Some on Wall Street blame the Fed for inequality.

Rabid Inequality? Some On Wall Street Increasingly Blaming The Fed

Kenneth Rapoza
Forbes, July 18, 2019

Excerpt...

Has inequality got ya down? Some on Wall Street are laying the blame on nearly a decade of easy-money policies from the world’s leading central banks, namely the Federal Reserve and the European Central Bank, where the benchmark interest rate is literally zero.

Snip...

With interest rates near their lower band, a key transmission channel of unconventional monetary policies—quantitative easing, yield curve control and forward guidance—has been to entice investors to take greater risk and hunt for yield outside of the traditional investment-grade bond market. This has inflated stock valuations, made junk bond yield look like investment-grade, and increased housing prices in major cities where real estate is a prized possession. All of this has exacerbated wealth inequality and is contributing to the social backlash against economic liberalism, says Rob Subbaraman, an economist with Nomura Securities in Singapore.

“Another aspect of inequality is uneven distributional impacts, with very low interest rates disproportionately hitting (retirees) who have much of their savings in low-interest bank saving deposits and young people seeking to save for their first home,” he says.

Quantitative easing has made bond traders very wealthy. The Fed or the European Central Bank (ECB) were their buyers of last resort. It was a winning trade. But the riff-raff downstream who rely on conservative investments to protect them in their retirement years are getting no bang for their buck.

Continues...

https://www.forbes.com/sites/kenrapoza/2019/07/18/rabid-inequality-some-on-wall-street-increasingly-blaming-the-fed/#307f55fc3457

Wall Street looted the banks in 2008. The US taxpayer made them whole, like they did when Wall Street looted the S&Ls in the late 80s. Elizabeth Warren has made clear how to change this tradition.