O Federal Reserve (Fed, the US central bank) released, on Thursday, 29, an annual report addressed to the United States Congress referring to 2020. In the document, whose most updated data are from February this year, the monetary authority assesses that the coronavirus pandemic continues to weigh on the largest economy on the planet.
“Although unprecedented fiscal and monetary stimuli and a relaxation of stringent restrictions on social distancing supported a rapid recovery of the US labor market last summer in the Northern Hemisphere, the pace of earnings slowed down and employment remains well below pre-pandemic levels,” he said.
The Fed also remembers that, after the first covid-19 shock, the prices of financial assets plummeted, but recovered soon after. “In particular, prices for equities, corporate bonds and residential real estate markets have returned or exceeded pre-pandemic levels, driven in part by positive vaccine-related news, additional fiscal stimulus and better-than-expected economic data,” he points out.
The institution adds that the vulnerabilities related to the indebtedness number of families and businesses grew in 2020. It also highlights that the banking system has proved resilient over the past year, helped by reforms implemented in the period following the 2008 financial crisis.
“When the pandemic intensified in March, large cushions of capital allowed banks to meet the substantial increase in corporate loan demand by providing repayment relief and other types of tolerance for households,” he explains.