The Federal Reserve is committed to providing sustained accommodation through its forward rate guidance and continued asset purchases to achieve our maximum employment and 2 percent average inflation goals. In parallel, additional fiscal support is essential to bridge past COVID’s second wave in order to avoid labor market scarring, reductions in crucial state and local services, and bankruptcies.
In addition, efforts geared toward reducing expenses and expanding fee business also began to bear fruit. Thanks to this reduction in their exposure to credit risk and the market risk pertaining to stock price volatility, financial institutions have been less constrained in the uses to which they can put their capital, and this situation has encouraged them to seek new business opportunities.