Black Americans are investing and participating less in the U.S. stock market compared to whites, according to the U.S. Federal Reserve.

While many saw their investments grow due to historic rebounds during the COVID-19 pandemic, Black Americans have largely been excluded. Why?

Black Americans are less likely to be engaged in the financial system which has led to them entering the COVID-19 pandemic with large financial gaps compared to their white counterparts. And it's likely those gaps will widen, John Lettieri, the Economic Innovation Group’s president and CEO told CNBC.

Although the Fed has dropped interest rates and the government attempted to boost the economy with COVID relief spending, these programs did not address racial disparities within the job market.

Employment and COVID-19 recovery have been disproportionate between both communities.

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