Senior Fed officials warn that Omicron threatens to trigger U.S. inflation

Senior Fed officials warn that Omicron threatens to trigger U.S. inflation



A senior Fed official warned that Omicron coronavirus variant By exerting further pressure on the supply chain and exacerbating the shortage of workers, it is likely to contribute to a surge in inflation in the United States.

“If it turns out that it is a bad variant, it may exacerbate the upward pressure on prices that we see in the market. Supply chain issues,” Cleveland Federal Reserve Chairman Loretta Mester (Loretta Mester) said in an interview with the Financial Times on Thursday.

Meister added that if Omicron is “more lethal than Delta,” then people who lose their jobs or resign during the epidemic are at risk. Pandemic Will continue to stay at home. “The fear of the virus is still one of the factors preventing people from re-entering the labor market,” she said.

Global supply chain tightening and U.S. worker shortageForcing employers to raise wages to attract new employees are the two main factors that have caused inflation to soar to 30-year highs.

Meester’s remarks are the latest sign that the Fed intends to continue withdrawing the massive stimulus measures it implemented at the beginning of the pandemic, despite the potential risks. U.S. economy From a new variant.

Earlier this week, Jay Powell stated Fight against inflation During the two days of testifying to Congress, he only briefly admitted that Omicron may cause damage to the economic recovery, which is the top priority of the U.S. Central Bank.

Mestre will become a voting member of the Federal Open Market Committee that sets the policy next year. He also downplayed the risk that the variant could curb demand — especially if the current vaccine proves to be effective.

“The economy is better at handling these variants,” she said. “Demand side effects have been reduced, but we have seen these supply side effects related to the virus.”

Meester responded to Powell saying she would support Faster withdrawal As a form of “insurance”, the Fed’s large-scale bond purchase program will give the central bank greater flexibility when raising interest rates next year.

“We have to bear the risk that those persistently high inflation may become more entrenched,” she said on Thursday. “This really gives us the right to choose… to act on the interest rate path.”

Meester said she will support at least one rate hike next year, and these two may be “appropriate.”

Powell told Congress this week that he believed Federal Reserve Should “consider ending our pace of asset purchases… maybe a few months earlier”.

Mary Daly, President of the Federal Reserve Bank of San Francisco, also expressed support for the cuts earlier on Thursday. “If we don’t have higher inflation readings, you might let the economy go a little bit more and see if we can survive Covid and have those [unemployed] The individual is back,” she said at an event hosted by the Peterson Institute for International Economics.

Raphael Bostic of the Atlanta Fed also expressed support for accelerated downsizing, while Fed Vice Chairman Richard Clarida said last month that he supports the Federal Open Market Committee (FOMC). ) Discuss this issue at the next policy meeting scheduled for December 14-15.


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