The Columbus Dispatch

Powell says COVID variant clouds inflation, outlook


Federal Reserve Chair Jerome Powell says that the appearance of a new COVID-19 variant could slow the economy and hiring, while also raising uncertaint­y about inflation.

The recent increase in coronaviru­s cases and the emergence of the omicron variant “pose downside risks to employment and economic activity and increased uncertaint­y for inflation,” Powell says in prepared remarks to be delivered to the Senate Banking Committee on Tuesday.

The new variant could also worsen supply chain disruption­s, he added.

In the past two weeks, other Fed officials have said the central bank should consider winding down its ultra-low interest rate policies more quickly than it currently plans. They cite concerns about inflation that has jumped to three-decade highs.

Yet Powell’s remarks suggest that the additional uncertaint­y raised by the omicron variant may complicate the Fed’s next steps.

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