Powell says COVID variant obscures inflation, economic outlook


FILE - Federal Reserve Chairman Jerome Powell speaks at an event in the South Court auditorium of the White House complex in Washington, November 22, 2021. Powell says the appearance of a new variant of COVID-19 could slow the economy and hiring.  He also says it increases uncertainty about inflation.  Powell said in remarks for the Senate Banking Committee on Tuesday that the recent increase in coronavirus cases and the emergence of the omicron variant pose downside risks to jobs and economic activity and uncertainty increased for inflation.  (AP Photo / Susan Walsh, file)

FILE – Federal Reserve Chairman Jerome Powell speaks at an event in the South Court auditorium of the White House complex in Washington, November 22, 2021. Powell says the appearance of a new variant of COVID-19 could slow the economy and hiring. He also says it increases uncertainty about inflation. Powell said in remarks for the Senate Banking Committee on Tuesday that the recent increase in coronavirus cases and the emergence of the omicron variant pose downside risks to jobs and economic activity and uncertainty increased for inflation. (AP Photo / Susan Walsh, file)

PA

Federal Reserve Chairman Jerome Powell has said the emergence of a new variant of COVID-19 could slow the economy and hiring, while increasing uncertainty about inflation.

The recent increase in coronavirus cases and the emergence of the omicron variant “present downside risks to jobs and economic activity and increased uncertainty for inflation,” Powell said in prepared remarks which will be presented to the Senate Banking Committee on Tuesday. The new variant could also worsen supply chain disruptions, he added.

Over the past two weeks, other Fed officials have said the central bank should consider ending its ultra-low interest rate policies faster than it currently plans. They cite concerns about inflation, which has peaked in three decades.

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


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