- The Federal Reserve expects household finances and business balance sheets to suffer “persistent fragilities” as a result of the shock to economic activity arising from the coronavirus pandemic, the central bank said in a report to Congress on Friday.
“The strains on household and business balance sheets from the economic and financial shocks since March will likely create persistent fragilities,” the report said. “Unlike past recessions, services activity has dropped more sharply than manufacturing - with restrictions on movement severely curtailing expenditures on travel, tourism, restaurants, and recreation - and social-distancing requirements and attitudes may further weigh on the recovery in these sectors,” the report said.
At the meeting, the Fed signaled the U.S. economy faces an arduous and uncertain recovery from the recession triggered by the coronavirus pandemic. That somber assessment of the outlook doused much of the optimism for a fast recovery that had been sown by the surprise growth in employment in May and factored heavily in Thursday’s dramatic sell-off on Wall Street, when U.S. stocks fell by the most since March.
'Persistent fragilities' means starvation and homelessness
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Source: Reuters - 🏆 2. / 97 Read more »