Federal Reserve's Janet Yellen hits out at growing income inequality in America

Fed boss says society faces difficult questions to promote equal opportunities

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The Independent Online

Janet Yellen, the head of the US Federal Reserve, has said Americans have gone through the most sustained rise in income inequality in a century over the last several decades.

In a speech to a Boston conference on economic opportunity, Yellen said this problem is of great concern to her and she pointed to increased education and ownership of small businesses as two ways to deal with the problem. 

"It is no secret that the past few decades of widening inequality can be summed up as significant income and wealth gains for those at the very top and stagnant living standards for the majority," Yellen said in her remarks to a conference organised by the Federal Reserve Bank of Boston.

"Society faces difficult questions of how best to fairly and justly promote equal opportunity," Yellen said. But she said she did not plan to offer solutions to these "contentious questions" but instead used her remarks to describe the landscape of inequality as it exists today.

She did talk about such factors as early childhood education, affordable higher education, business ownership and inheritances as "building blocks" that could be used by Americans to boost wealth. 

"In focusing on these four building blocks, I do not mean to suggest that they account for all economic opportunity, but I do believe they are all significant sources opportunity for individuals and their families to improve their economic circumstances," Yellen said. 

In her Boston speech, Yellen made no comments on the current state of the economy or on the future course of interest rates. 

The Fed next meets later this month and many economists believe the recent financial market turbulence and downgrades to economic prospects around the globe increase the likelihood that the central bank will not start raising its key short-term interest rate until next summer.