Lowering the federal funds rate helped offset a portion of the effects of financial disruption on credit conditions for households and businesses. And policy easing should have helped the flow of credit by reducing some of the concerns about the effects of a weaker economy on repayment prospects.
In particular, partly because consumption opportunities were constrained by the imposition of various restrictions, pent-up demand for private consumption materialized all at once as the spread of COVID-19 subsided. This has increased labor demand, which in turn has led to labor shortages and upward pressure on wages.