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Sunday, June 9, 2013
On Uneven Global Markets and Income Inequality
Last week, as many global markets had broad swings and investors waited for the U.S. Employment report, Credit Suisse published "Trickle Down QE: Monetary Policy & Inequality" which highlighted the uneven results of stimulus efforts by the U.S. Federal Reserve and said “It is an inconvenient irony that monetary policy may be having the unintended consequence of exacerbating growing inequality [in wealth]”. When the Bureau of Labor Statistics reported on Friday that the U.S. added 175,000 jobs in May (exceeding expectations of 165,000) , equity markets responded positively. for the week, markets were uneven, with U.S. equities up slightly and many other global markets down.
The better than expected employment results provide some good news in an uncertain economic environment, while the Credit Suisse report validates the outcome of limited wage growth and minimal creation of higher paying jobs.