ABA Banking Journal
No Result
View All Result
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive
SUBSCRIBE
ABA Banking Journal
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive
No Result
View All Result
No Result
View All Result
ADVERTISEMENT
Home Economy

Fed analysis: Pandemic savings boom could be fueling inflation

October 21, 2022
Reading Time: 2 mins read
Fed analysis: Pandemic savings boom could be fueling inflation

A dramatic increase in the rate of personal savings during the COVID-19 pandemic—driven in part by federal stimulus—may have contributed to persistently high inflation amid constrained supply, according to an economic analysis published today by Federal Reserve staff. The authors estimated that U.S. households accumulated roughly $2.3 trillion in savings in 2020 and through the summer of 2021, far beyond what they would have saved if income and spending components had grown at pre-pandemic levels. They also concluded that since last year, households have decumulated about one-quarter of these excess savings, as the saving rate has dropped below its pre-pandemic trend.

The personal saving rate jumped from less than 10% in the years before the pandemic to a high of more than 26% in the second quarter of 2020, the authors estimated. Since the start of 2022, the rate has dipped below 5%. They also estimated that households in the lower half of income distribution were still holding about $350 billion in excess savings as of mid-2022—mostly stemming from the boost to income induced by fiscal stimulus in 2020 and 2021.

That excess savings has been used to pay down debt, to invest in equity and other financial assets or as a down payment for buying a home, instead of keeping them as liquid assets, thus shifting where the savings appear on balance sheets, according to the analysis. Regardless of how the money was spent, excess savings resulted in higher net wealth and stronger balance sheets for lower-income households, which have continued to support spending and credit performance.

Households in the top half of income distribution hold the vast majority of excess savings, at about $1.35 trillion as of mid-2022, the authors estimated. With that group able to travel and spend again, their excess savings are likely contributing to higher levels of spending, they said. Still, the report’s authors added that the recent demand by upper-income households likely has been boosted more by earlier gains in equity and housing prices than by their excess savings.

 

ADVERTISEMENT
Tags: EconomyFederal ReserveSavings accounts
ShareTweetPin

Related Posts

Fed Survey: Banks tighten policies on commercial real estate lending

ABA DataBank: Planned/announced office conversions spike

Commercial Lending
June 20, 2025

With low housing supply continuing to be a concern, planned conversions of office commercial real estate into residential units are starting to pick up.

Survey: Customers see little difference between mortgage lenders

OCC releases mortgage performance report for Q1 2025

Economy
June 20, 2025

The OCC released the first quarter 2025 mortgage metrics report, which showed that 97.6% of first-lien mortgages in the federal banking system were current and performing at the end of the quarter.

FBI: Crypto-related fraud losses increased 45% in 2023

Justice Department seizes millions of dollars linked to alleged crypto investment scams

Compliance and Risk
June 20, 2025

The Department of Justice announced it has seized $225.3 million in funds linked to cryptocurrency investment scams. The action marks the largest cryptocurrency seizure in Secret Service history.

ABA urges FinCEN to reevaluate BOI collection burden on banks

FinCEN releases figures on BSA filings

Compliance and Risk
June 20, 2025

Financial institutions filed 4.7 million suspicious activity reports in fiscal year 2024. They filed 20.5 million currency transaction reports during the same time frame.

FinCEN to propose new rules on money laundering, whistleblower program

Treasury official outlines principles for Bank Secrecy Act modernization

Compliance and Risk
June 18, 2025

The Treasury Department is exploring ways to streamline the filing process for suspicious activity reports and currency transaction reports as part of a broader effort to modernize BSA enforcement, Deputy Secretary of the Treasury Michael Faulkender said.

FDIC, OCC tighten policy considerations for bank merger applications

Report: Bank merger activity continues at steady pace

Community Banking
June 18, 2025

While there was a temporary stall in bank merger activity in early 2025 because of the economic fallout of tariffs and other Trump administration policies, overall quarterly deal announcements have held steady, according to a new analysis by...

NEWSBYTES

ABA DataBank: Planned/announced office conversions spike

June 20, 2025

OCC releases mortgage performance report for Q1 2025

June 20, 2025

Justice Department seizes millions of dollars linked to alleged crypto investment scams

June 20, 2025

SPONSORED CONTENT

AI Compliance and Regulation: What Financial Institutions Need to Know

Unlocking Deposit Growth: How Financial Institutions Can Activate Data for Precision Cross-Sell

June 1, 2025
Choosing the Right Account Opening Platform: 10 Key Considerations for Long-Term Success

Choosing the Right Account Opening Platform: 10 Key Considerations for Long-Term Success

April 25, 2025
Outsourcing: Getting to Go/No-Go

Outsourcing: Getting to Go/No-Go

April 5, 2025
Six Payments Trends Driving the Future of Transactions

Six Payments Trends Driving the Future of Transactions

March 15, 2025

PODCASTS

Podcast: Staying close to clients amid tariff-driven volatility

June 18, 2025

Podcast: Old National’s Jim Ryan on the things that really matter

June 12, 2025

Podcast: What bankers need to know about ‘First Amendment audits’

June 5, 2025
ADVERTISEMENT

American Bankers Association
1333 New Hampshire Ave NW
Washington, DC 20036
1-800-BANKERS (800-226-5377)
www.aba.com
About ABA
Privacy Policy
Contact ABA

ABA Banking Journal
About ABA Banking Journal
Media Kit
Advertising
Subscribe

© 2025 American Bankers Association. All rights reserved.

No Result
View All Result
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive

© 2025 American Bankers Association. All rights reserved.