On Friday, Federal Reserve chair Janet Yellen warned that rising income and wealth inequality in the U.S. can do serious harm to the economy. In a speech at an inequality conference in Boston, Yellen noted that “income and wealth inequality are near their highest levels in the past hundred years, much higher than the average during that time span and probably higher than for much of American history before them.” Yellen noted that living standards have been “stagnant” for most Americans for decades—a dangerous lack of development in a country that relies mostly on consumer spending to drive growth. Income inequality perpetuates itself in a cycle, Yellen also said, because the poor tend to have less access to economic opportunities which, in turn, also hurts the economy. “I think it is appropriate to ask whether this trend is compatible with values rooted in our nation’s history, among them the high value Americans have traditionally placed on equity of opportunity,” Yellen said.
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