As building blocks of the economy, the financial health of each household contributes to the financial health of the country as a whole. Thus, the Federal Reserve has an inherent interest in the financial stability and strength of individual households, whose spending, saving, and investing significantly impact economic growth.
Financially stable families also make the economy run more smoothly as these families face less economic risk and have more economic mobility. Ultimately, financially secure households are the backbone of a strong domestic economy. Indeed, the condition of household finances is a key factor in the sluggish pace of recovery that we are seeing today.