Daily Management Review

US Fed: US economy will face new problems


The US Federal Reserve (Fed) has predicted new problems for the national economy, Reuters writes. The US central bank's management spoke about possible threats in a speech before Congress with the traditional report for the last six months.

According to the Fed's assessment, there remain "significant risks" of the collapse of new companies in the country even despite growing signs that the economy is recovering from the effects of the coronavirus pandemic.

The Fed's biggest concern is the high indebtedness of businesses, both large and small. The situation is not mitigated by positive factors such as high corporate cash balances, low interest rates and the recovery of economic growth.

Corporate borrowing is now at its highest level ever in US history, and it could rise further in the near future - thanks to a $1.9 trillion bailout package from the Joe Biden administration.

The funds will be distributed to businesses, households in the form of soft loans with the possibility of further write-offs and lump sum payments as well as increased unemployment benefits.

source: reuters.com