This issue was present during the first asset purchase program, especially when the pace of weekly purchases reached a peak of about $ billion in the middle of last year. The pace of those purchases at times put pressure on liquidity in the MBS market, leading the Desk to take mitigating actions when possible. 8 In the current circumstances, there would seem to be room for the Federal Reserve to expand its holdings of Treasury securities without creating difficulties for market functioning. The SOMA currently holds about 12 percent of the outstanding stock of Treasury coupon securities – a smaller share than it held before the financial crisis. Moreover, the supply of Treasury securities will remain ample, as the Treasury is expected to issue around $ trillion of securities over the next year. Any purchase program that the FOMC decides upon, whether aimed at Treasury securities or MBS, would be designed to support market functioning as much as possible while still achieving the program’s economic objectives. The deep liquidity of these markets has considerable value to our economy, and we should take whatever steps possible to leave this liquidity intact. The second operational challenge I mentioned comes at the other end of the program – the exit. In particular, it is important to consider whether balance sheet expansion would complicate the eventual exit of the Federal Reserve from its accommodative policy stance. I am confident that our ability to exit will not be compromised by any further expansion of the balance sheet.
Global data reveal that close to 95 million people during 2020, fell below the threshold of the poverty line, more that it was expected or projected at the start of the crisis. In this context, labor market data clearly indicate that youth, low skilled workers and women particularly in emerging and developing economies, have been hit harder. There is statistics pointing to a global employment rate for men below the pre-pandemic level by about 5 percentage points, while the women employment rate is still 7 percentage points below the prepandemic level. Given the nature of the crisis, Western Balkan region was not shielded from this global shock. Economies in the region are small and highly open in trade and financial terms, heavily exposed to external developments. GDP in the region declined by 3.4% in 2020, but with intensity that differs across counties in the region, ranging from –1% in Serbia to –15.2% in Montenegro. Henceforth, the disproportionality of the impact of the crisis pertains to the region, as well. Let me use labor statistics to illustrate some important aspects of how COVID affected women. First of all, in general, I can say that this crisis hit women more heavily than men, and this has come on top of the fact that women faced pre-crisis gaps in many respects on the labor market. Couple of numbers in this segment.