Although the economy is recovering from the downturn caused by the Govt-19 epidemic, the risk of corporate bankruptcy is high in the United States. The US Federal Reserve (Fed) said this in its half-yearly report on monetary policy for Congress on Friday.

According to the report, lower interest rates and renewed economic growth will alleviate the plight of US companies, but “The threat of bankruptcy for SMEs and some large companies is significant“.

Central Bank President Jerome Powell will present the report at a hearing in Congress next week. It will present its own assessment of the state of the economy and face questions from legislators. According to Reuters, they are likely to focus on how much help the US government needs from the federal government to deal with the effects of corona virus controls.

US President Joe Biden is now seeking $ 1.9 trillion (roughly $ 41 trillion) in new stimulus measures in Congress. Last year, Congress approved nearly $ 4 trillion in measures, for example, one-time housing subsidies and small business loans.

An epidemic caused the U.S. gross domestic product (GDP) to fall 3.5 percent last year. The Congressional Budget Office (CPO) forecast in early February that GDP would grow by 4.6 percent this year. President Biden’s planned trigger package has not yet been included in this assessment.

Source: Reuters, CDK

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