The op-ed is by a former regional Fed President who doesn't work or speak for the Fed now. However, his argument is that the wealth effect of high asset prices is a key driver of higher spending and rising consumer prices.
>>The majority of Americans don't even participate in the stock market outside of a 401k at best.
It seems that stock market household participation has inched up over the past 4 decades driven by a variety of factors and is likely a (slight) majority participation rate at this point[1][2] although as one might expect heavily skewed towards higher-income households.
As just one example, a tech employee whose unvested RSUs are sitting at the 2021 highs might be more willing to splash out on all kinds of things -- vacations, restaurants, a nicer fridge, primary or investment residential properties, etc -- than they would if the share price was a lot lower.
Middle America's 401k gets hammered (pushing retirement off x-years) and small set of tech workers can't buy as much? Seems more harmful than good. fwiw, I don't have 401k/and I own a tiny amount of stock.
As rents go up, these rents eat up most of the wages, thereby increasing wages. Increasing wages cause inflation, and it is called "cost-push inflation", as both cost of goods, cost of services include wages.
