FED Chairman Jerome Powell finally acknowledged that inflation is on the rise. Along with the new COVID variant concerns, these issues are leading to the market reacting negatively today.
The Omaha World-Herald reported this morning:
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 inflation.
The recent increase in delta cases and the emergence of the omicron variant “pose downside risks to employment and economic activity and increased uncertainty for inflation,” Powell says in prepared remarks to be delivered to the Senate Banking Committee Tuesday. The new variant could also worsen supply chain disruptions, he said.
Powell’s comments come after other Fed officials in recent weeks have said the central bank should consider winding down its ultra-low interest rate policies more quickly than it currently plans. They cited concerns about inflation, which 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.
“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,” Powell said.
Of course, Powell has a track record of doing and saying the wrong things.
At least Powell is making money during these times.