Economics
Low U.S. Rates Exacerbate Racial Wealth Gap, Paper Shows
- Low rates help White Americans more than Black workers
- Fed has signaled it will keep rates low through 2023
Photographer: Kena Betancur/AFP/Getty Images
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Keeping interest rates low in an effort to boost a weak economy, which the Federal Reserve has signaled it will do through at least 2023, may actually exacerbate wealth inequality between White and Black households, according to a new economic paper.
The gains in stock prices that come with a low interest-rate environment and disproportionately benefit White Americans, far outweigh the job and income gains that Black citizens experience at the same time, according to the paper released Friday. Its authors include Alina Bartscher from the University of Bonn and New York Fed economist Moritz Schularick.