The combination of highly supportive fiscal policy and monetary policy was critical in driving the initial strong bounceback from the first wave of the pandemic.3 Similarly today, it is vitally important to provide a lifeline to hard-hit households and businesses facing the harsh reality of a resurgent COVID second wave as a bridge to the time an effective vaccine will be widely available.
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.