Fed: Financing conditions remain relatively tight for small businesses

The US Federal Reserve in its semi-annual monetary policy report noted on Friday that financing conditions remain relatively tight for households with low credit scores and for small businesses, as reported by Reuters.

Additional takeaways

"Institutions at the core of the US financial system remain resilient."

"Asset valuation pressures have returned to or exceeded pre-pandemic levels in most markets, including in equity, corporate bond and residential real estate markets."

"Elevated pre-pandemic asset valuation pressures that briefly subsided at the outbreak's onset have retraced in most markets."

"Fed's remaining emergency facilities continue to serve as important backstops against further stress."

"Vulnerabilities associated with business, household debt increased in 2020; insolvency risk at small, mid-sized US firms are considerable."

"Monetary policy rules would currently prescribe "Deeply negative" interest rates for the u.S., a fact motivating fed's other actions to support the economy."

Market reaction

The US Dollar Index showed no immediate reaction to this publication and was last seen losing 0.33% on the day at 90.29.