FILE PHOTO: The Federal Reserve building is set against a blue sky, amid the coronavirus disease (COVID-19) outbreak, in Washington, U.S., May 1, 2020. REUTERS/Kevin Lamarque
Reuters: Fed warns of 'significant' financial vulnerabilities from pandemic
The U.S. Federal Reserve warned Friday that the financial sector faces "significant" vulnerabilities due to the coronavirus pandemic, as businesses and households grapple with fragile finances for the foreseeable future.
In its latest report on financial stability, the Fed said the global pandemic imposed sweeping risks. While policy actions from the Fed and others have helped bolster the economy, and the banking system has withstood the initial downturn, the report warned of major risks if the pandemic proves lengthy or more severe than anticipated.
"The COVID-19 outbreak poses severe risks to businesses of all sizes and millions of households," the central bank said as it ran down a list of trouble spots that could arise depending on how long the virus persists and keeps the economy on its heels.
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Update #1: The Federal Reserve says parts of the financial system came under severe strain in March, sees further threats possible -- AP
Update #2: Fed Warns of Significant Hit to Asset Prices If Crisis Grows -- Bloomberg
WNU Editor: The message from the US Federal Reserve is very clear. If the pandemic continues and it becomes even more severe in the coming months, we are in trouble.
