Federal Reserve chief Janet Yellen warned that the gap between the rich and poor in the United States is widening and has reached a near 100-year high.
In a speech at a conference on inequality in Boston, the Fed chair did not mention monetary policy nor the current turmoil in financial markets.
Instead, she focused on the widening wealth disparity and how that impacts economic opportunity.
“By some estimates, income and wealth inequality are near their highest levels in the past hundred years,” Yellen said, noting the gap has grown steadily over recent decades, despite a brief pause during the 2008 crisis.
During the recession, the worst since the Great Depression of the 1930s, the richest Americans lost money, and increased government spending helped offset losses for the less wealthy.
“But widening inequality resumed in the recovery, as the stock market rebounded,” Yellen said, noting that “wage growth and the healing of the labour market have been slow, and the increase in home prices has not fully restored the housing wealth lost by the large majority of households for which it is their primary asset.”
