“There is no doubt that the Fed's large-scale asset purchases have caused major increases in a number of asset prices in the economy. This is especially true of mortgage backed securities and corporate bonds, and quite possibly of equities as well. For those people and institutions holding those things, the run up in prices has been a wealth bonanza.” PeopleWellsHas BeensRunningWealthNumbersEconomyDoubtSecurityMajorsIncreaseInstitutionsScalesCorporateNo DoubtFedsAssetsEquityMortgageLarge ScaleCorporate Bond Author:Gerald Epstein
“Initially, QE contributed to a pretty significant increase in inequality. It raised asset prices, which are owned primarily by the wealthy, while having relatively small if any positive impacts on bank lending, employment, wages or economic growth, so ordinary people haven't had much help. By the third round of QE in 2012-2014, the effects had likely muted quite a bit. There were probably not big impacts on asset prices from QE and the positive effects on employment growth might have strengthened somewhat.” PeopleIfsHelpingBigsMightBitsGrowthEconomicEffectsHavensOrdinaryThirdsIncreaseImpactRaisedRoundsSignificantEmploymentInequalityWealthyAssetsWagesOrdinary PeopleEconomic GrowthLendingPositive ImpactHaving StrengthBig Impact Author:Gerald Epstein
“Raising interest rates might lead to some initial reductions in wealth by lowering asset prices, but it could also take a bite out of your paycheck and dampen your prospects of finding a job. It's a bit of damned if you do and damned if you don't.” IfsMightJobsBitsInterestWealthFindingsRateAssetsBitesInitialsReductionProspectsPaychecksInterest Rate Author:Gerald Epstein
