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The Federal Reserve says Omicron variants can prolong supply-demand imbalances.

File Photo: John Williams, Chief Executive Officer of the Federal Reserve Bank of New York, will speak at an event held in New York, USA on November 6, 2019.Reuters / Carlo Allegri

December 1, 2021

(Reuters) – The latest COVID-19 variant could exacerbate some of the supply chain challenges and shortfalls that lead to higher inflation, and Federal Reserve officials withdraw monetary policy support. You need to take that into account when deciding how. John Williams, Governor of the York Federation, said.

“Obviously, that adds a lot of uncertainty to the outlook,” Williams said in an interview with the New York Times released Wednesday, referring to the Omicron variant of COVID-19.

If the variant leads to continued demand for goods and services that are currently facing shortages and stagnates recovery in other areas, it could lead to a “slightly slow rebound overall,” Williams said. Stated. “Inflationary pressures can increase in high-demand areas,” he added.

Last month, the FRB began reducing its monthly purchases of Treasury securities and mortgage-backed securities from $ 120 billion, at a pace to get it on track to complete its bond purchase program by mid-2022.

On Tuesday, Federal Reserve Chair Jerome Powell told the U.S. Senate Banking Commission that U.S. central bank policy makers were at a meeting on December 14-15, months earlier than expected. He said he would discuss whether to end the program.

Williams didn’t say he would support accelerating the tapering of asset purchases, but Fed officials said: He said there was a lot to consider at the policy meeting.

“The question is, given how strong the economy is, does it make sense to finish these purchases a little earlier, perhaps in a few months?” Williams said. “It’s a decision, a debate. I think we need to work on it.”

(Report by Jonnelle Marte, edited by Paul Simao)



The Federal Reserve says Omicron variants can prolong supply-demand imbalances.

Source link The Federal Reserve says Omicron variants can prolong supply-demand imbalances.

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