The Federal Reserve's efforts to stimulate the U.S. economy after the financial crisis ended up costing savers nearly half a trillion dollars in interest income, according to report released Thursday.
Since the central bank dropped interest rates to near zero at the end of 2008, savers have labored under plain-vanilla bank accounts and money market funds that have yielded close to nothing. Critics have long said the Fed's quantitative easing efforts have boosted asset prices, particularly in the stock market, but exacted severe costs across other parts of the economy.
In a landmark report, Swiss Re quantifies just how much savers and others have languished while the policy has pushed the Fed's balance sheet past the $4.5 trillion mark but failed to generate above-trend economic growth or substantial core inflation.
The reinsurance firm put the number at $470 billion in the 2008-13 period studied, so the number is likely even higher now. (Tweet this)
Swiss Re called the impact of low-rate dollar-cheapening policies "indisputable. Meanwhile, the impact of foregone interest income for households and long-term investors has become substantial."