Fed sees ‘persistent fragilities’ for households and businesses: Fed report

(Reuters) – The Federal Reserve expects U.S. household finances and business balance sheets to grapple with “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.

In its twice-annual Monetary Policy Report to U.S. lawmakers, the Fed also reinforced expectations for a sharp decline in economic activity in the current quarter. Recent data suggests “real gross domestic product will contract at a rapid pace in the second quarter after tumbling at an annual rate of 5% in the first quarter of 2020.”

The report comes two days after the Fed wrapped up its latest two-day policy meeting and signaled the U.S. economy faces an arduous and uncertain recovery from the recession triggered by the coronavirus…