(Washington) US Central Bank (Fed) President Jerome Powell said “the recent increase in COVID-19 cases and the emergence of the Omicron variant pose downside risks to jobs and the economic activity and increase uncertainty about inflation ”.
Indeed, “greater concerns about the virus could reduce people’s willingness to work in person,” according to Jerome Powell’s speech Tuesday morning to the Senate Banking Committee, which was released on Monday.
This “could slow progress in the labor market and intensify supply chain disruptions,” he added.
The new Omicron variant of COVID-19, which has prompted many countries to take new travel restriction measures, is raising fears for the global economic recovery.
The Fed chairman, whom Joe Biden has just reappointed for a second term, also found it “difficult to predict the persistence and effects of supply constraints, but it now appears that the factors pushing inflation upwards will largely persist next year ”.
However, he pointed out that “most forecasters, including at the Fed, continue to expect a significant drop in inflation over the next year, as supply and supply imbalances. demand will subside ”.
Inflation accelerated in October in the United States, and stood at 5% year-on-year, its highest level since 1990, according to the Commerce Department’s PCE index.
Jerome Powell assured, last Monday during his speech to the White House after the announcement of his appointment, that the Fed would act so that inflation does not “take root”.
Joe Biden received heavyweights from US distribution on Monday like giant Walmart. They assured that the situation was improving on the front of the supply problems observed since the summer in the United States.
Jerome Powell and Treasury Secretary Janet Yellen will be heard jointly on Tuesday and Wednesday before the Senate Banking Committee and the House of Representatives Financial Services Committee as part of the follow-up to the stimulus plans.
The boss of the Fed will also have to be heard, concerning his appointment, by the Senate which must confirm him in his post.