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Fed isn't fueling U.S. inequality, Daly says

Published 06/23/2020, 10:46 AM
Updated 06/23/2020, 10:50 AM
© Reuters. FILE PHOTO: San Francisco Federal Reserve Bank President Mary Daly poses in San Francisco

© Reuters. FILE PHOTO: San Francisco Federal Reserve Bank President Mary Daly poses in San Francisco

By Ann Saphir

(Reuters) - San Francisco Federal Reserve President Mary Daly on Tuesday defended the U.S. central bank from criticism that its easy monetary policy and emergency lending programs are doing more to help the rich than the poor.

"There really isn't this bright line that separates Main Street from Wall Street," Daly told CNN International. "If we don't repair the financial markets and ensure they have liquidity, they can't pass along the interest rate changes to households and businesses that need them the most...our support for the economy supports everyone."

In the face of the coronavirus pandemic the Fed pushed interest rates down to near-zero, bought trillions of dollars of bonds, and rolled out nearly a dozen programs to backstop and extend corporate credit and promote bank lending.

Critics say those moves benefit the rich by boosting the price of assets like stocks, even as millions of the working poor lose their jobs and income. Increased national attention to racism after the killing of George Floyd in police custody last month has sharpened the public focus on the Fed's role in exacerbating inequalities in the economic sphere.

Daly said the Fed's policies are indeed saving jobs by repairing the "plumbing" of the financial system and helping companies maintain access to the financing that is critical to their operations.

Asked if the Fed's policies make inequality worse even inadvertently, Daly was unequivocal.

"Not in my judgment," she said.

But Daly said fighting racism, in addition to being a moral issue, also helps the economy by bringing more people into the labor market.

"Ultimately our job is to ensure that every American that wants a job can get one...but right now of course we are fighting a global pandemic and so it's emergency support that we are offering."

© Reuters. FILE PHOTO: San Francisco Federal Reserve Bank President Mary Daly poses in San Francisco

Latest comments

this woman should be in an asylum
The rich gets richer because they have $ is their main goal. They”ll find ways improve ROIs (either outsourcing, push more duties to employees, robotize, or worst tax evation)
These arguments are just talking points - J. Powell and FED developed to calm the social unrest.  Please review Dr. Martenson's review  (https://www.peakprosperity.com/the-fed-may-be-worse-than-covid-19   ; /min. 26:00    ) of what exactly FED is doing to make 1% much richer. I would like to hear  Daly's response to these arguments.  Especially , how FED drives serious inequality on the society.   Inequality is grossly growing exacly due to FED's monetary policy.
Fed main job is to ensure maximum employment, stable prices, and moderate interest rates. What does that have to do e race?
Are you really that disconnected?
Chinese slave labor is what's fueling the inequality.
Maybe this article should have a chart of top 1% wealth vs Fed balance sheet since 2008
David - i hope that we are using the vast new communications tools at our disposal to grow a national concience and that good ideas can emerge and the devisive hate speach will end. If you have a plan for fixing homelessness in San Fran, please let’s hear it. Who knows, your idea might even be good enough to fix the problem, create jobs, help the economy and make you rich?
San Francisco is manipulated by Democrats, with tens of thousands of homeless on the street. Democrats state is not part of the US.
murica sure is enjoying that cali money doe, specialy the red states
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