The Fed and Wall Street

by Ramesh Ponnuru

At Bloomberg, I look ahead to Janet Yellen’s confirmation hearings and an argument she can expect to hear: that loose money from the Fed has been helping Wall Street, not the broader economy.

The Dow Jones Industrial Average is above its peak from before the financial crisis. The labor market … isn’t. So, advocates of tighter money say, the Fed has been increasing the country’s inequality of income and wealth.

If Yellen is challenged on this point, she shouldn’t dismiss it out of hand — but she should explain why the concern is exaggerated.