Data: Bureau of Economic Analysis; Federal Reserve Board; World Bank; McKinsey Global Institute analysis; Chart: Axios Visuals
U.S. household net worth has soared to a nearly sixfold multiple of the country’s gross domestic product.
Why it matters: The past two decades of growth in net worth are mostly due to the appreciation of assets like real estate and equities — not to the accumulation of savings, according to a new report out from McKinsey Global Institute.
This growth has been supported by loose monetary policy “launched against the backdrop of two massive shocks— the 2008 financial crisis and the COVID-19 pandemic,” the McKinsey analysts write.
Not a coincidence: Net worth levels broke away from historical norms around the time the U.S. began its long-running low-interest-rate policy.