The Federal Reserve has indicated a possible return to quantitative easing, a monetary policy tool involving the creation of money to buy government bonds and other assets. The aim is to inject liquidity into the financial system, reduce interest rates, and stimulate the economy during downturns. Previous rounds have seen trillions of dollars enter financial markets, driving mortgage rates down and home prices up to record levels.
"We didn’t kill the American Dream. It was sold for parts." — middleclassparty (@middle_class_us)
As the housing supply hit a historic low, many young Americans, particularly those entering adulthood, found themselves priced out of the market. Economists cited by Rift News warn that Generation Z will be the most affected demographic, grappling with rising housing costs, stagnant wages, and a shifting economic environment.
Experts fear that ongoing quantitative easing could funnel more liquidity into the real estate sector, potentially escalating housing costs further for prospective buyers. Generation Z is now facing the worst housing affordability crisis in modern American history. A user on social media platform X expressed frustration, stating, "We didn't kill the American Dream. It was sold for parts," highlighting the stark contrast between the financial stability of previous generations and the present challenges.
The world's largest asset manager, BlackRock, with over $10 trillion under management, is a significant player in this landscape. Unlike traditional banks, BlackRock manages investments without taking deposits or issuing loans. Its clients include pension funds, governments, and wealthy individuals. BlackRock's influence extends to shaping corporate decisions and impacting government policy, raising concerns about conflicts of interest due to its dual role as an investor and advisor.
BlackRock's involvement in real estate through mortgage-backed securities and rental housing developments has led to scrutiny from various quarters, including environmental advocate Robert F. Kennedy Jr. According to a tweet by Camus, a user on Twitter, the consolidation of real estate ownership by major asset managers could render homeownership unattainable for many.
Former regulators and policymakers have moved to BlackRock, further intertwining Wall Street with Washington. Rift News reports that the firm's connections to the Chinese Communist Party have also been questioned, given their unique market access in China and investments in companies with alleged ties to the Chinese military.
A 2023 congressional investigation delved into BlackRock's investment practices, particularly concerning retirement funds in Chinese companies on the U.S. blacklist. The investigation uncovered over $429 million invested in such companies.
Quantitative easing represents more than just a policy for Gen Z; it's a determinant of their future in terms of housing affordability, savings, debt management, and the ability to start families. The ongoing debate is whether this generation will achieve the milestone of homeownership or become a generation of perpetual renters.
