The wealth of middle-class families still has not recovered from the 2007 to 200...
FILE PHOTO: Federal Reserve Board Governor Lael Brainard speaks at the John F. Kennedy School of Government at Harvard University in Cambridge, Massachusetts, U.S., March 1, 2017. REUTERS/Brian Snyder
Brainard, in a broad discussion of the middle class’s economic prospects, said the Fed is increasingly concerned about the economic impact if middle-income households continue to struggle in their ability to build wealth, finance homes and educations, and even stay current with their bills. Even as wages rose last year, a 2018 Fed survey whose results are to be released in coming weeks found that a third of families earning from $40,000 to as much as $99,000 would struggle to meet an unexpected bill of $400, either borrowing the money or selling something or not paying it at all.
“The discrepancy between slow growth in income and wealth, on the one hand, and rising costs of housing, healthcare, and education, on the other, may be making it more difficult for middle-income families to achieve middle-class financial security,” Brainard said. Over time “the shifting of wealth and income to the top of the distribution and away from the middle could pose challenges to the health and resilience of our economy.
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