Here's the interesting thing: the fact that QE and lowering interest rates almost to zero has worsened inequality, does not mean that raising interest rates will help reduce inequality.

The Fed needs to adopt new tools, on its own and perhaps in cooperation with the other parts of the US government, to improve the economy from the bottom up. This includes increasing facilities for debt forgiveness for under-water mortgages and excessive student loans; increased credit facilities for small businesses and cooperatives; helping to underwrite mechanisms for creating affordable housing in cities; and more restrictive enforcement of financial regulatory rules to help rein in excessive banker risk and pay.

The impact of QE on generating more lending by Wall Street to Main Street and in generating more employment and increasing overall investment in the economy is quite modest. QE probably limited the initial collapse of the economy in 2008, and likely had a very small positive impact on economic growth, but its broader impact on jobs and growth in the economy seems not very big.

The Fed cannot reduce inequality on its own; far from it. This requires a concerted effort by the government, broadly speaking, to support a variety of efforts. These include things like raising the federal minimum wage, eliminating unfair restrictions on union organizing, increased fiscal spending on needed infrastructure with a condition that these jobs will be decent paying jobs. Of course, this is just the tip of the iceberg, and far from the question of the role of the Federal Reserve.

QE and other aspects of Fed policy increased inequality pretty significantly. This is reinforced if you take into account all the other non-standard measures the Fed used to bail out the banks early on in the [2008] crisis.

Most progressive critics don't want to destroy the power of the Fed to regulate the macroeconomy and finance. They want to regain control over it so that it better serves the interests of the whole population.

Here's the interesting thing: the fact that QE and lowering interest rates almost to zero has worsened inequality, does not mean that raising interest rates will help reduce inequality.