MADRID The U.S. Federal Reserve is still monitoring the situation in the banking industry very carefully, Fed Chair Jerome Powell said on Thursday.

"We are very reluctant to say" if the sector's turmoil is over, Powell said during an event held by the Spanish central bank in Madrid. "Our job is to worry about things."

There are still some funding vulnerabilities in the U.S., Powell added, giving part of the real estate market as an example.

"There is a valuation adjustment going on, mainly about offices. Work-from-home has changed things," he said.

Earlier this month, Powell said that commercial real estate lending remains under pressure but appears unlikely to threaten the broader financial system.

(Reporting by David Latona and Jesus Aguado, editing by Inti Landauro and Toby Chopra)