Economic specialists are noting that the wealth gap among the richest citizens has widened even further following the Covid-19 pandemic. “It appears that the federal regulations and taxes, if any, aren’t particularly favorable toward big businesses or the wealthy,” economist Peter St. Onge mentioned in a phone conversation. He believes the Federal Reserve is contributing to income inequality—a scenario he views as a misunderstanding of free market mechanics, not just by Republicans, but more broadly.
“It’s crucial to address this issue, as it’s not really the free market at play here,” he added. “It’s more about government manipulation of the financial systems.” His comments came in light of data indicating that the percentage of GDP held by billionaires jumped from 14.1% in 2020 to 21.1% by 2025.
A report from JPMorgan Chase suggested that the number of billionaires in the U.S. has risen from 1,400 in 2021 to almost 2,000 in 2024, as noted by the Wall Street Journal in April.
The Federal Reserve, which operates independently from presidential or congressional approval, sets monetary policies and oversees banking systems.
St. Onge elaborated that “debt is primarily a tool for the rich,” asserting that billionaires have benefited financially from subsidized loans, which have lowered since the pandemic, allowing for manipulated interest rates. He pointed out during Covid, loans became markedly cheaper, enabling many to borrow at rates as low as 3% or even 3.5%. “You could practically profit from borrowing money, but that’s not how free markets function. It’s the wealthier individuals who benefit disproportionately from these lower rates,” he explained.
St. Onge highlighted the stark contrast in debt levels: the average debt for the top 5% of Americans hovers around $600,000, whereas for most Americans, it’s roughly $74,000. “That’s about a ninefold difference,” he said. “When loans are too cheap, the rich gain over nine times more benefits than the rest.” He added that assets are even more lopsided, revealing that the top 5% possess an average of $7.8 million in assets compared to just $62,000 for the average citizen—a staggering 130 times difference.
“The value of homes and stocks is largely based on anticipated future income, which gets discounted by interest rates,” he stated. “If we were to halve the long-term interest rates, we’d effectively double stock values.” St. Onge then referenced economic growth in the 1970s and early 2000s, noting how aggressive rate fixing by the Fed has led to rising asset values.
At a conference, economist Steve Hanke discussed how Federal Reserve policies have exacerbated income inequality. He noted that billionaire GDP shares surged by 7.6 percentage points since 2020, proposing that, with increased money supply, asset prices inevitably rise, benefiting those with substantial holdings.
Hanke remarked, “During the pandemic, the Fed engaged in extensive money printing,” and explained how changes in the money supply correlate with asset prices. He pointed out the significant growth in the broader U.S. money supply, which peaked in May 2021. This was followed by a rise in the S&P 500 and inflation, marking notable economic shifts.
The ongoing policies by the Federal Reserve, St. Onge argues, are plugged into politics, and he suggests that even those Democrats critical of income disparity should reconsider their stance, as it inaccurately reflects the influence of those Fed policies. On the opposing side, Vice President J.D. Vance criticized the current administration for policies perceived to harm the working class, praising previous efforts to assist everyday Americans.
In conclusion, the discussion around income inequality and economic policy persists, with varying opinions about the roles of government and the market.
