U.S. Fed official says Omicron has ‘dangers’ | Business and Economic Affairs

Jerome Powell said the recent rise in COVID lawsuits and new reforms could ‘slow down the progress’ in the labor market.

Federal Reserve chairman Jerome Powell, in his introduction to the coronavirus, said it posed a threat to both sides of the central bank to achieve stable prices and more jobs.

“The recent rise in Covid-19 cases and the emergence of omicron differences poses significant employment and economic risks and uncertainties in inflation,” Powell said in a statement scheduled for Monday, a day before he appeared before the Senate Banking Committee. . “Excessive stress for the virus can reduce people’s motivation to work independently, which can delay the progress of the labor market and increase job losses.”

Powell, in a nutshell, did not comment on monetary policy or the possibility of changing the pace of his acquisition – an important issue that some officials have recently raised.

Powell – who last week was elected by President Joe Biden for a second term as chief executive of a central bank – will appear in public on Tuesday at 10 a.m., along with Treasury Secretary Janet Yellen, in the first two days of litigation proceedings. related to the cause of the plague. The House Financial Services Committee will follow up with another meeting Wednesday.

To her, Yellen said in a statement to the group that even though she was following an omicron-type story, “for now, I am confident that our recovery is still strong.”

Yellen also called on the Senate to raise funds for Biden ‘s spending on so-called Build Back Better, and warned lawmakers to soon increase national debt. Earlier he also said the Treasury could run out of money by Dec. 15.

“I can not overemphasize the need for Congress to address this issue,” Yellen said of the credit limit. “If we don’t, we will be speeding up our recovery.”

The discovery of a new version of Covid-19 has brought new economic uncertainty. Governments around the world have pushed for travel restrictions and the World Health Organization has warned that the omicron crisis could lead to new diseases.

While employment continues to grow this year, “there is ample way to find more jobs and participate in the workforce, and we look forward to continuing to do so,” Powell said, adding that unemployment continues “indefinitely” for blacks and Hispanics. .

Even in the midst of the crisis caused by the epidemic, the US economy is thriving. Financial experts of JPMorgan Chase & Co. have increased their annual growth rate to 7% from 5% for the last three months of the year. Growth has led to a rise in inflation, with consumer prices in October rising sharply in the last 30 years.

“Many forecasters, including the Fed, continue to expect inflation to decline sharply over the next year when inequality in supply and demand is eliminated,” Powell said. “It is difficult to predict the resilience to the effects of inflation, but it seems that the factors that are driving inflation will continue until next year.”

Fed officials in recent weeks have discussed the possibility of speeding up a move that would reduce monthly interest rates, which could give them a chance to raise interest rates sooner than next year if needed to reduce inflation.

“I’m ready to accelerate our decline in spending,” Atlanta Fed President Raphael Bostic, who voted this year on the Federal Open Market Committee for Policy, told Fox News in an interview Friday. San Francisco Fed President Mary Daly, who is also a voter this year and has been harsh on the point, told Yahoo! Economics earlier last week to approve a faster pace if inflation continues to rise sharply. Daly’s interview took place before the omicron news.

Fed officials will see CPI and performance reports for November ahead of their final annual meeting in Dec. 14-15.