Here’s Another Damning Chart That the Fed-Fueled Recovery Will Implode
The Federal Reserve’s monetary policy fueled the recovery since the crash in March.
After hitting all-time highs on September 2, the U.S. stock market has undergone correction amid a tech selloff.
The implications of the Fed’s accommodative policies are taking effect in the form of significant distortions in the real economy, signaling a growing disparity between Wall Street and Main Street.
Ever since the U.S. stock market crashed in March, the Federal Reserve has bootstrapped equities into a mind-boggling recovery. This recovery has taken place along with an unprecedented rise in the Federal Reserve’s balance sheet and continued near-zero rates.
Liz Ann Sonders, Chief Investment Strategist at Charles Schwab & Co., tweeted out damning data on Thursday depicting tremendous distortions in consumer spending.
The rich are the ones doing most of the consumer spending, according to the data.
While the top earners are spending the most, low-income industries have suffered the majority of job losses. According to these data, the top 20% are responsible for 38.6% of overall consumer spending.
Distortions With the Real Economy Are Soaring
While the Fed keeps pumping the U.S. stock market, the situation on the ground has worsened.
According to a report from Labor Department data, almost 25% of prime-age workers remain unemployed compared with pre-coronavirus levels.
Meanwhile, among the job losses because of the shutdown, 30.6% are permanent.