Tag Archives: Pandemic

India says virus variants not behind upsurge in cases

By Krishna N. Das and Neha Arora

NEW DELHI (Reuters) – India said on Tuesday mutated versions of coronavirus were not responsible for an upsurge in cases in two states, a potential relief for a country where mask-wearing and social distancing have largely disappeared.

Maharashtra in the west and Kerala in the south account for 75% of India’s current active cases of about 147,000, and both states have seen a sudden rise in new infections in recent days, fueling calls for a faster roll-out of vaccines.

India has reported more than 11 million cases – the most in the world after the United States – and about 156,000 deaths. Actual infections have inched closer to 300 million in the country of 1.35 billion, according to a random study of antibodies done by the government.

A top government health official confirmed the long-time presence of two mutants – N440K and E484Q – in those two states as well as elsewhere in the country and abroad. Authorities have also found the UK variant in 187 people in India, the South African one in six and one case of the Brazilian mutation.

“There is no reason today for us to believe, on the basis of scientific information, that these are responsible for the upsurge of the outbreak,” Vinod Kumar Paul, who heads a government committee on vaccines, told a news conference.

Though cases have come down sharply since a September peak, Paul said India was still vulnerable, especially given that even previously badly affected cities like Pune in Maharashtra were getting hit again. He urged people to wear masks and avoid social events – guidelines openly flouted by both federal and state ministers.

The northern state of Punjab, which has also seen a rise in cases, said indoor gatherings would be restricted to 100 and outdoor to 200 from March 1. District heads have also been permitted to decide on night curfews in hotspots, and testing will be increased, the state’s chief minister said.

Punjab is one of the worst performing states in vaccinating their healthcare workers, according to the federal government.

The government on Tuesday asked five states, including Maharashtra and Punjab, to expedite vaccination of their healthcare and frontline workers in light of the surge in cases, according to letters shared by the health ministry.

India has given nearly 12 million doses to its health and frontline workers since beginning the campaign in mid-January, a pace that will have to be increased sharply to meet the target of reaching 300 million people by August.

Health Secretary Rajesh Bhushan said India would very soon start immunizing people over 50 and those with medical conditions, with greater involvement from private hospitals. Government hospitals are now running around 80% of vaccination sites.

The government has recently come under pressure to expand coverage at home given the world’s largest vaccine maker has exported COVID-19 shots to more than two dozen countries.

India is using a vaccine developed by Bharat Biotech and the state-run Indian Council of Medical Research, and another licensed from AstraZeneca and Oxford University. Other vaccines are in the queue, including Russia’s Sputnik V and products from Cadila Healthcare and Novavax.

(Reporting by Krishna N. Das and Neha Arora; Editing by Gareth Jones, William Maclean, Philippa Fletcher and Giles Elgood)

Portugal’s COVID-19 nightmare eases but end of lockdown still out of sight

By Catarina Demony and Miguel Pereira

LISBON (Reuters) – While the number of COVID-19 cases in Portugal is falling, the the far slower decline in hospitalizations and intensive care patients has left Lisbon residents resigned to the nationwide lockdown lasting for many more weeks.

“I’m a bit optimistic but we cannot think everything is fine,” said Ana Maria, 76, as she walked around a Lisbon neighborhood. “People must continue to be careful. The lockdown should continue for a bit longer so that we can get rid of this once and for all.”

Portugal, a nation of just over 10 million people, faced its toughest battle against the coronavirus pandemic last month. For weeks it had the world’s worst surge.

The nightmare has eased with the lockdown, with daily case and death tolls falling rapidly to just 63 deaths and 1,032 new cases on Tuesday – levels last seen in October when businesses were still open.

But the number of people in hospital remains around double the level authorities say must be reached to alleviate measures. A lockdown put in place on Jan. 15, shutting non-essential services and schools, is expected to last until at least the end of March.

“It is going well but the lockdown isn’t going to end for now,” Antonio Formiga, 58, said as he stood outside the bakery where he works. “We thought it would even if at a slower pace. We really need it (to end) because the business is reaching its limit.”

Health experts warned that lifting the lockdown too soon could lead to a rise in cases caused by the variant initially discovered in Britain, currently responsible for almost half of the country’s cases.

Another surge would be catastrophic for a fragile health system.

Germany sent on Tuesday a replacement team of military doctors and nurses to take over from the first deployment sent three weeks ago to prop up Lisbon’s under resourced hospitals.

“The costs of this endeavor are high but when it comes to European solidarity that’s unimportant,” German Ambassador Martin Ney said at the military base.

Portugal’s total number of infections is 799,106, and the total death toll stands at 16,086 people.

(Reporting by Catarina Demony and Miguel Pereira, Additional reporting by Patricia Vicente Rua, Editing by Victoria Waldersee and Angus MacSwan)

Fed’s Powell says support for economy needed for ‘some time’

By Howard Schneider

WASHINGTON (Reuters) – The U.S. economic recovery remains “uneven and far from complete” and it will be “some time” before the Federal Reserve considers changing policies it adopted to help the country back to full employment, Fed Chair Jerome Powell said on Tuesday.

The U.S. central bank’s interest rate cuts and purchases of $120 billion in monthly government bonds “have materially eased financial conditions and are providing substantial support to the economy,” Powell said in remarks prepared for delivery to a Senate Banking Committee hearing on the state of the economy.

“The economy is a long way from our employment and inflation goals, and it is likely to take some time for substantial further progress to be achieved,” the hurdle the Fed has set for discussing when it might be appropriate to pare back support.

While the health crisis in the country is improving and “ongoing vaccinations offer hope for a return to more normal conditions later this year,” Powell said, “the path of the economy continues to depend significantly on the course of the virus and the measures taken to control its spread.”

Powell’s appearance in Congress comes at a significant juncture for the U.S. economy, which is still reeling from the pandemic but perhaps poised to take off later this year if the vaccination program hits its stride.

The hearing before the Senate Banking Committee, one of the Fed chief’s mandated twice-a-year appearances on Capitol Hill, is Powell’s first since Democrats won the White House and control of both chambers of Congress.

After his opening remarks, Powell will field questions from senators who are likely to focus on the tension between a pandemic that has claimed more than half a million U.S. lives and left millions unemployed, and an economy flush with savings and central bank support, and about to get a fresh gusher of federal spending.

INFLATION DEBATE

The growing likelihood that Congress will pass President Joe Biden’s $1.9 trillion stimulus plan has raised concerns about a possible spike in inflation and overheating in asset markets, but Powell’s message to lawmakers will likely be a familiar one: don’t let off the gas.

Even with Americans being vaccinated at a rate of more than 1.5 million a day and coronavirus caseloads dropping, Powell and his fellow Fed policymakers are focused instead on the nearly 10 million jobs missing from the economy compared to a year ago, and the potent risks still posed by the virus.

They’ve pledged to keep interest rates low and use other monetary policy tools to speed up a labor market recovery. Two weeks ago, Powell pushed for a “society-wide commitment” to that goal – a nudge to lawmakers debating Biden’s stimulus plan.

The scale of the proposed stimulus, coming on the heels of about $4 trillion in federal aid and heavy bond purchases by the Fed last year, has flustered the feathers of inflation hawks and stoked criticism that the U.S. central bank has boosted prices of stocks and other assets to unsustainable levels.

Fed officials are united on that front. They don’t think inflation is a risk, and regard much of the recent rise in stock prices, for example, as a sign of markets’ confidence in a post-pandemic economic rebound, not an artificial run-up fueled by cheap money.

The hearing on Tuesday, which will be followed by Powell’s appearance before the House of Representatives Financial Services Committee on Wednesday, may also provide a gauge of his prospects of remaining Fed chief when his current four-year term expires early next year.

Biden will have to decide in coming months whether to reappoint Powell, who was chosen for the job by former President Donald Trump. The nomination is subject to Senate ratification.

(Reporting by Howard Schneider; Editing by Paul Simao)

What you need to know about the coronavirus right now

(Reuters) – Here’s what you need to know about the coronavirus right now:

U.S. reaches 500,000 deaths

The United States on Monday crossed the milestone of 500,000 COVID-19 deaths just over a year since the pandemic claimed its first known victim in Santa Clara County, California.

In a proclamation honoring the dead, President Joe Biden ordered the U.S. flag to be flown at half-staff on public buildings and grounds until sunset on Friday.

“On this solemn occasion, we reflect on their loss and on their loved ones left behind,” Biden said in the proclamation. “We, as a Nation, must remember them so we can begin to heal, to unite, and find purpose as one Nation to defeat this pandemic.”

One-way to freedom

Prime Minister Boris Johnson unveiled a map out of lockdown for England on Monday that would keep some businesses shuttered until the summer, saying caution was necessary to ensure there were no reversals on a “one-way road to freedom”.

After imposing one of the strictest lockdowns in the western world in January to counter a highly contagious variant of the novel coronavirus, Johnson said Britain was in a position to enjoy the results of one of the world’s fastest vaccine programs.

Starting in two weeks with the reopening of schools, the phased plan will go through four stages, with at least five weeks in between each stage.

Afghanistan begins vaccination drive

Afghanistan began its first COVID-19 vaccinations on Tuesday, administering doses initially to security force members, health workers and journalists, in a campaign that may face challenges from a sharp rise in violence.

The war-damaged country received 500,000 doses of AstraZeneca’s vaccine from the Serum Institute of India, which is producing the vaccine for mid- and low-income countries, earlier this month.

Taliban insurgents fighting the foreign-backed Afghan government have announced their backing for the vaccination campaign.

Compensation for serious vaccine side effects

The World Health Organization has agreed a no-fault compensation plan for claims of serious side effects in people in 92 poorer countries due to get vaccines via the COVAX sharing scheme, resolving a big concern among recipient governments.

The program, which the WHO said was the first and only vaccine injury compensation mechanism operating on an international scale, will offer eligible people “a fast, fair, robust and transparent process,” the WHO said in a statement.

“By providing a no-fault lump-sum compensation in full and final settlement of any claims, the COVAX program aims to significantly reduce the need for recourse to the law courts, a potentially lengthy and costly process,” the statement said.

Nurses in exchange for vaccines

The Philippines will let thousands of its healthcare workers, mostly nurses, take up jobs in Britain and Germany if the two countries agree to donate much-needed coronavirus vaccines, a senior official said on Tuesday.

The Philippines, which has among Asia’s highest number of coronavirus cases, has relaxed a ban on deploying its healthcare workers overseas, but still limits the number of medical professionals leaving the country to 5,000 a year.

(Compiled by Linda Noakes; editing by Barbara Lewis)

Trials of retooled vaccines for variants could take months: U.S. FDA

By Michael Erman

(Reuters) – Drugmakers should test any COVID-19 vaccines that have been retooled to combat new variants of the coronavirus in clinical trials designed to track the immune response of hundreds of test subjects, which could take months, U.S. regulators said on Monday.

Vaccine developers may need to modify their shots to provide protection against new variants of the coronavirus that turn up in the United States should they fail to elicit immune response in their current form, the U.S. Food and Drug Administration said in a statement.

The FDA said it believes currently authorized vaccines from Pfizer Inc with partner BioNTech SE and Moderna Inc. are effective against variants currently circulating in the United States.

Acting FDA Commissioner Janet Woodcock said drugmakers should not wait until a mutated virus is demonstrated to be able to escape the vaccines to begin developing new versions.

“We need to anticipate this and work on it, so that we have something in our back pocket before the threshold is upon us,” she said at a news conference.

The emergence of new, more contagious variants has prompted the U.S. government to step up efforts to track coronavirus mutations and try to keep vaccines and treatments effective against any new variants.

Pfizer and Moderna have both said they plan to run clinical trials of versions of their vaccine that have been redesigned to combat the highly contagious COVID-19 variant that has become prevalent South Africa and has turned up in several U.S. States.

The FDA made the comments as part of a newly updated guidance for companies making vaccines, tests and therapeutics for COVID-19.

As part of its updated guidance, the FDA recommended that vaccine makers test any modified vaccines in both previously unvaccinated people and vaccinated people. The manufacturers should compare the immune response of a modified vaccine against both the new variant as well as the original virus.

The FDA also recommended monitoring test subjects’ safety for at least seven days, to support emergency use authorization for modified vaccines.

The agency is trying to allow drugmakers to make the change with a minimal amount of extra data needed, said Dr. Peter Marks, director of the FDA’s Center for Biologics Evaluation and Research.

Still, the type of trial the agency wants, “might take a few months, whether it be two or three,” Marks said. “I can’t say exactly how long but again, that type of the scale of the amount of time.”

“We want to be ready so that we can move it into production, when it’s ready and when it’s needed,” he said.

(Additional reporting by Manojna Maddipatla and Mrinalika Roy in Bengaluru; Editing by Jonathan Oatis and Bill Berkrot)

Teachers may play role in in-school COVID-19 transmission: U.S. CDC

(Reuters) – Teachers may play an important role in the transmission of COVID-19 within schools, the U.S. Centers for Disease Control and Prevention (CDC) said on Monday, citing a study conducted in elementary schools in a Georgia school district.

The report comes after researchers from the agency last month said there was little evidence that schools were spreading COVID-19 infections in the country – based in part on a study of schools in Wisconsin – easing concerns about allowing in-person learning. The Wisconsin study found significantly lower virus spread within schools compared with transmission in the surrounding communities.

An investigation involving about 2,600 students and 700 staff members of a Georgia school district’s elementary schools showed nine clusters of COVID-19 cases involving 13 educators and 32 students at six elementary schools, the CDC said.

Of these, two clusters involved probable teacher-to-teacher transmission that was followed by teacher-to-student transmission in classrooms, the agency said in its Morbidity and Mortality Weekly Report.

Transmission from teachers resulted in about half of 31 school-related cases, according to the investigation.

The study was subject to some limitations including difficulty in determining whether coronavirus transmission happened in school or out in the local community, the agency noted.

Distinguishing between the two types of transmission was particularly challenging when the 7-day average number of cases per 100,000 persons exceeded 150, the agency said.

The CDC said COVID-19 vaccination of educators should be considered as an additional mitigation measure to be added when available, although not required for reopening schools.

(Reporting by Manojna Maddipatla in Bengaluru; Editing by Bill Berkrot)

‘One-way road to freedom’: Johnson sets out cautious lockdown exit plan

By William James and Elizabeth Piper

LONDON (Reuters) – Prime Minister Boris Johnson unveiled a map out of lockdown for England on Monday that would keep some businesses shuttered until the summer, saying caution was necessary to ensure there were no reversals on a “one-way road to freedom”.

After imposing one of the strictest lockdowns in the western world in January to counter a highly contagious variant of the coronavirus, Johnson said Britain was now in a position to enjoy the fruits of one of the world’s fastest vaccine programs.

Starting in two weeks with the reopening of schools, the phased plan will go through four stages, with at least five weeks in between each stage. The final step, when most restrictions will be lifted, will not start until June 21 at the earliest.

Britain and the world would not eliminate COVID-19 altogether, Johnson said. “And we cannot persist indefinitely with restrictions that debilitate our economy, our physical and mental well-being, and the life chances of our children,” Johnson told parliament.

“And that is why it is so crucial that this roadmap is cautious but also irreversible. We’re setting out on, what I hope and believe, is a one-way road to freedom.”

With almost 130,000 fatalities, Britain has suffered the world’s fifth-highest official death toll from the pandemic and its economy has seen its biggest crash in over 300 years.

But in two months it has already managed to provide an initial vaccine dose to more than a quarter of the population, the fastest rollout of any big country, making it a test case for governments worldwide hoping to return life to normal.

Even with encouraging data on the impact of vaccines, the British government’s cautious approach highlights how slow a process it will likely be for many countries.

UNDER PRESSURE

Johnson has come under pressure, including from many in his Conservative Party, to allow more freedoms to millions stuck at home and offer hope to firms forced to close.

Under his plan schools will reopen on March 8, freeing parents who have had to juggle work and home schooling.

However, easing of social mixing bans will initially be limited and the government will ask people to work from home when possible for some weeks until it has completed a review into social distancing at some point before the summer.

At the end of March, a small number of people will be able to mix outdoors, but non-essential shops, and outdoor-only service in restaurants and pubs, will not reopen until April 12 at the earliest.

As the plan unfolds, lawmakers will have a chance to vote on specific steps. Authorities in Scotland, Wales and Northern Ireland, which are responsible for their own public health, will also ease restrictions over the coming months.

There was mixed reaction from business leaders to the plan. The Confederation of British Industry said it offered hope, but the hospitality industry said it would be hard for many businesses to survive until they could reopen.

“Even with the prime minister’s new roadmap, the future of thousands of firms and millions of jobs still hangs by a thread,” said Adam Marshall, Director General of the British Chambers of Commerce.

There were widespread calls for finance minister Rishi Sunak to extend support, such as schemes that have paid the salaries of workers sent home because of the pandemic. An announcement will not come until Sunak delivers his budget next month, but Johnson promised not to “pull the rug out”.

“For the duration of the pandemic the government will continue to do whatever it takes to protect jobs and livelihoods across the UK,” Johnson told parliament.

SPEEDY VACCINE ROLL-OUT

Johnson, who was treated in intensive care for COVID-19 last year, has been forced to juggle pressure from Conservative lawmakers to restart the economy and from scientific advisers who fear a resurgence of the virus if he unlocks too quickly.

“The message that comes out of all of the modelling is … get (infection) numbers down before you start releasing, go slowly, (and) go in blocks that you can measure the effect of after four or five weeks,” the government’s top science adviser Patrick Vallance told reporters.

England’s vaccine campaign is significantly reducing cases, with a drop of around 70% in infections among healthcare workers who have had a first dose of the Pfizer-BioNTech shot, health officials said on Monday.

Britain moved faster than most countries to secure vaccine supplies and has been inoculating people rapidly since December, a strategy that has driven sterling higher on hopes of an economic rebound. The pound hit a new three-year high of $1.4050 in early London trading on Monday.

Some 17.7 million Britons, over a quarter of the 67 million population, have now received a first dose, behind only Israel and the United Arab Emirates in vaccinations per capita.

(Additional reporting by Alistair Smout, Estelle Shirbon, Guy Faulconbridge, Kate Holton, David Milliken, writing by Michael Holden and Elizabeth Piper, editing by Giles Elgood)

A day that will live in infamy: U.S. crosses 500,000th COVID-19 death

By Maria Caspani and Anurag Maan

NEW YORK (Reuters) – The United States on Monday crossed the staggering milestone of 500,000 COVID-19 deaths just over a year to the day since the coronavirus pandemic claimed its first known U.S. victims in Santa Clara County, California.

The country had recorded more than 28 million COVID-19 cases and 500,054 lives lost as of Monday afternoon, according to a Reuters tally of public health data, although daily deaths and hospitalizations have fallen to the lowest level since before the Thanksgiving and Christmas holidays.

About 19% of total global coronavirus deaths have occurred in the United States, an outsized figure given that the nation accounts for just 4% of the world’s population.

“These numbers are stunning,” Dr. Anthony Fauci, a top infectious disease adviser to President Joe Biden told ABC News’ “Good Morning America” program. “If you look back historically, we’ve done worse than almost any other country and we’re a highly developed, rich country.”

Biden and Vice President Kamala Harris are set to commemorate the huge loss of life due to COVID-19 later on Monday during an event at the White House that will include a speech by the president, a moment of silence and a candle lighting ceremony.

Biden will also order that U.S. flags on federal property be lowered to half staff for five days, White House spokeswoman Jen Psaki told reporters.

The National Cathedral in Washington will also toll its bells 500 times on Monday evening to honor the lives lost to COVID-19 in a livestream event, according to a notice on its website.

In 2020, the virus has taken a full year off the average life expectancy in the United States, the biggest decline since World War Two.

Sweeping through the country at the beginning of last year, the U.S. epidemic had claimed its first 100,000 lives by May.

The death toll doubled by September as the virus ebbed and surged during the summer months.

Pandemic-weary Americans, like so many around the world, grappled with the mountain of loss brought by COVID-19 as health experts warned of yet another coronavirus resurgence during the upcoming fall and winter months.

Americans lost mothers and fathers, husbands and wives, brothers, sisters and friends to the virus. For many, the grief was amplified by the inability to see loved ones in hospitals or nursing homes and by the physical distancing imposed by authorities to curb the virus spread.

By December, the death toll had reached 300,000 as the United States entered a deadly post-holiday season that would claim 230,000 lives in the span of less than three months.

With numbers that made the appalling toll early in the pandemic pale by comparison, deaths recorded between December and February accounted for 46% of all U.S. COVID-19 fatalities, even as vaccines finally became available and a monumental effort to inoculate the American public got underway.

Despite the grim milestone, the virus appears to have loosened its grip as COVID-19 cases in United States fell for the sixth consecutive week. However, health experts have warned that coronavirus variants initially discovered in Britain, South Africa and Brazil could unleash another wave that threatens to reverse the recent positive trends.

Fauci cautioned against complacency and urged Americans to continue public health measures such as wearing masks, physical distancing and avoiding crowds while officials race to inoculate the population, particularly with these more contagious new variants circulating.

“We’ve got be really careful and not just say ‘OK we’re finished now, we’re through it,” he told ABC.

(Reporting by Maria Caspani in New York and Anurag Maan in Bengaluru and Susan Heavey in Washington; Writing by Maria Caspani; Editing by Bill Berkrot and Lisa Shumaker)

COVID-19 heart problems may persist for months; smartphone oxygen meters prove helpful

By Nancy Lapid

(Reuters) – The following is a roundup of some of the latest scientific studies on the novel coronavirus and efforts to find treatments and vaccines for COVID-19, the illness caused by the virus.

COVID-19 heart problems may remain evident months later

Signs of heart injury in hospitalized COVID-19 patients could be precursors to longer-lasting heart problems, researchers have found. They studied 148 survivors of severe COVID-19 who had high levels of troponin – a protein released when the heart has been injured – while they were hospitalized. An average of two months after they left the hospital, magnetic resonance imaging (MRI) still showed some sort of heart issue in 48% of the patients, including heart attacks, heart muscle inflammation, inadequate blood flow, or some combination of those problems, the researchers reported on Thursday in the European Heart Journal. Among patients with heart attacks or inadequate cardiac blood flow, two-thirds had no past history of coronary disease. “Ultimately, we cannot definitely establish a link between the abnormalities detected on these cardiovascular magnetic resonance scans and the acute COVID-19 infection,” the authors said. But the high prevalence of the abnormalities “suggests a likely link.” Dr. Matthew Toomey, cardiac ICU director at Mount Sinai Morningside Hospital in New York City who was not involved in the study, noted: “We don’t have the benefit of long-term follow-up to see what it will develop into.” He added that he was guardedly optimistic that most patients will not end up with heart failure.

Samsung smartphone oxygen meters could help in COVID-19

A device in Samsung S9 and S10 smartphones that measures oxygen levels in the blood meets U.S. Food and Drug Administration standards and could be used to monitor COVID-19 patients, researchers said. Oxygen saturation levels are usually monitored with devices called pulse oximeters that clip onto a finger. Falling levels can indicate serious disease and need for intervention. Pulse oximeters used in hospitals are expensive, and inexpensive versions sold in drugstores are of variable accuracy, the researchers said in a report posted on Thursday on medRxiv ahead of peer review. The phones they studied have built-in pulse oximetry sensors, and the proprietary Samsung algorithms that interpret the signals “are very good,” said coauthor Sara Browne of the University of California, San Diego. “We are not aware of any other smartphone that has clinical grade pulse oximetry in it. Samsung did an awesome job on this,” she said. Samsung dropped the sensors from their phones for 2020 and 2021, Browne said. “As healthcare practitioners, we would love to see them put back in,” she added. Her team estimates that over 100 million S9 and S10 phones are still in circulation and said they could be particularly useful in countries where access to accurate pulse oximetry is limited.

PTSD often follows serious COVID-19

Italian doctors who interviewed COVID-19 survivors up to four months after their diagnosis found nearly one in three had post-traumatic stress disorder (PTSD). Their study included 381 adult survivors, roughly 80% of whom had been hospitalized. Aside from PTSD, seen in 30% of study participants, other psychiatric issues included depressive episodes (diagnosed in 17%) and generalized anxiety disorders (7%), according to a report published on Thursday in JAMA Psychiatry. Patients with PTSD were more likely to be female, to have been delirious or agitated while hospitalized, and to be suffering from persistent COVID-19 symptoms. The researchers point out that they only studied patients from a single hospital and did not compare them to patients with other serious illnesses, so they cannot say whether PTSD is more common after COVID-19. They note, however, that the prevalence of PTSD in their patients “is in line with findings … reported after other types of collective traumatic events.”

(Reporting by Nancy Lapid and Linda Carroll; Editing by Bill Berkrot)

Fed sees ‘considerable’ risk of ongoing U.S. business failures

WASHINGTON (Reuters) – The risks of ongoing business failures in the United States “remain considerable” even as the economy emerges from the coronavirus pandemic, the Federal Reserve said on Friday in its semi-annual monetary policy report to Congress.

Business borrowing “now stands near historic highs,” the U.S. central bank said in the report. Even though large cash balances, low interest rates, and renewed economic growth may dampen problems in the near term, “insolvency risks at small and medium-sized firms, as well as at some large firms, remain considerable.”

Fed Chair Jerome Powell will present the report in hearings before the U.S. Senate Banking Committee on Tuesday and the U.S. House of Representatives Financial Services Committee on Wednesday.

After presenting his own summary of where the economy stands he will field questions from lawmakers that are likely to focus on how much more help the economy needs from the federal government to reach the point where ongoing COVID-19 vaccinations make it safe to resume normal commerce.

The Biden administration is pushing a $1.9 trillion stimulus plan that has already cleared a major hurdle in the Senate, money on top of the nearly $900 billion approved late last year and the roughly $3 trillion appropriated at the start of the crisis in 2020.

Those federal payments, including one-time checks to families, increased unemployment insurance, and loans to small businesses, led to faster-than-expected economic growth and less-than-anticipated financial stress among households and the banks that hold their mortgages and credit card loans.

But while banks and household balance sheets remain in reasonable shape, the Fed’s reference to business debt highlights the potential economic hangover still to come after a historically trying year.

Along with business failures, the report noted how changes to the economy that are still underway could, for example, cut the market for already highly-valued commercial real estate and lead to “sharp declines” in prices – a potential blow to investors or lenders involved with those properties.

The report also noted that the borrowing and spending used in some countries to fight the pandemic had made their financial systems “more vulnerable” than before, and the situation may be getting worse. Stress in some emerging market nations, the report warned, could spill over “and produce additional strains for the U.S. financial system and economic activity.”

Next week will be Powell’s first appearance on Capitol Hill since Democrats won the White House and control of both chambers of Congress.

The Fed has pledged to keep its current policy of low interest rates and $120 billion in monthly bond purchases intact until the recovery is more complete. That may be tested in coming months if, as expected, the reopened U.S. economy begins to generate rising inflation.

(Reporting by Howard Schneider; Editing by Paul Simao)