The Fed, Inequality and Accounting Identities

Annie Lowrey at the NYT continues a mini-debate about whether the Fed is promoting inequality with its quantitative easing program. The argument is that by pushing down interest rates it is contributing to the run-up in stock prices and housing prices. Since stock is hugely disproportionately held by the wealthy and homeowners are better off than the population as a whole, this policy is increasing inequality.

This is undoubtedly true, although the extent of the impact can be debated. (High c...