The substantial business disruption triggered by the COVID-19 global pandemic continues to plague the economy and challenge financial institutions.

The Fed maintains a dovish stance on the economy with risk skewed toward additional accommodation should financial conditions tighten. Economic risks increase as efforts are made towards further reopenings should COVID-19 cases again accelerate.

The Fed has stated that uncertainty remains “very elevated” and that continued fiscal support will be necessary. The stalemate on Capitol Hill persists over the next round of fiscal support as expanded unemployment benefits and the second round of Paycheck Protection Program (PPP) lending have expired.