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2021-04-18 — washingtonpost.com

The Fed has several tools to protect the economy, and Powell deployed them with full force last year. But that kind of intervention aids some parts of the economy more than others.

Slashing interest rates and backstopping corporate debt, for example, helped direct money into the financial system. Some of the biggest beneficiaries were wealthier Americans who hold investments. As a stark sign of how the rich got richer in the past 12 months, the number of billionaires on Forbes's 35th-annual ranking grew by nearly a third, swelling by 660.

Claudia Sahm, a former Fed economist and now a senior fellow at the Jain Family Institute, said the inequality stems from the limitations of the Fed's monetary policy tool kit. Low interest rates or asset purchases influence the macroeconomy as a whole. In the Fed's efforts to quicken the recovery, Sahm said that "some of the problems they're trying to solve, they make a little bit worse."

"It's not intentional," she added. "They don't like [Tesla's] Elon [Musk] more than the worker at Walmart. But the reality is that their tools make him better off more quickly than the worker."

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The Fed uses a wide dashboard of metrics to monitor the labor market. And recently, pressure has grown to drill down beyond the aggregate unemployment rate, which was 6 percent in March. Economists note that the overall figure doesn't account for major disparities in the jobless rate between White, Black, Hispanic and Asian workers.

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