Is the Federal Reserve preparing to taper the taper?
Fed Chair Jerome Powell warned that the omicron variant of concern poses a risk to the United States economy, adding that the rise in coronavirus infections complicates its inflation picture.
“The recent rise in COVID-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation,” Powell said in remarks he plans to deliver to Senate lawmakers on Tuesday. “Greater concerns about the virus could reduce people’s willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions.”
The Eccles Building started tapering its $120-billion-a-month quantitative easing program, with markets penciling in an increase to interest rates by June.
But the omicron variant could throw a wrench into these plans if there is a spike in cases.
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