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Federal Reserve Bank of Cleveland Governor Loretta Mester threatens the Financial Times that variants of the Omicron coronavirus will further squeeze the supply chain and exacerbate labor shortages, helping to boost inflation in the United States. He said he was doing it.
“If it turns out to be a bad variant, it can exacerbate the upward pressure on prices in terms of supply chain issues,” Mester told the paper. interview On thursday.
“Fear of the virus is one of the factors that keeps people from re-entering the workforce,” Mester said, saying that if a new variant is more toxic than Delta, there is a risk that some people have lost or quit. I added that it was there. Their work during the pandemic will stay home.
Earlier this week, Federal Reserve Chair Jerome Powell said the U.S. central bank was ready to respond to the possibility that inflation would not recede in the second half of next year, as most forecasters now expect. He said he needed to be.
“We must enjoy the risk that these persistently high inflation rates may be more embedded,” Mester said. “It really is to give us an option … to go on the path of interest rates.”
Mr Mester said he supported at least one rate hike next year and could be “appropriate” twice.
Still, she said the economy was good at dealing with these varieties, adding that the side effects of demand were mitigated, but the side effects of supply remained.
Mester will vote for the Fed’s policy-making committee in 2022.
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