AFL-CIO gets it completely wrong when it cautions against the Federal Reserve raising interest rates as it would worsen inequality, according to them. They have got their logic messed up. It is the Fed’s policy of zero interest rates and QE that have messed up labour income, household savings, retired workers’ pensions, etc. Zero interest rates have boosted financial asset prices while doing far little of use to the real economy. After six years of ultra-loose monetary policy, if ‘household median income is flat in the 76th month of a recovery’, then AFL-CIO must reasonably wonder if the Fed policy of zero interest rates and QE had anything to do with it. Instead, they want it perpetuated.
Even if the Fed were to end it now, it might already be too late. But, nonetheless, without an exit – howsoever messy and howsoever long it might take – from this policy framework, workers of the United States and their families will not get much relief.
AFL-CIO must think this one through logically.