risks to the economy and inflation

risks to the economy and inflation
risks to the economy and inflation

(Teleborsa) – The new one variant of the Covid Omicron it poses downside risks for the economy and the labor market, as well as intensifying the uncertainty on the inflation front, which is already significantly above the 2% target. “The recent increase in Covid-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity, creating a picture of greater uncertainty for inflation.” This is what the Federal Reserve Chairman, Jerome Powell, in the observations prepared in view of today’s speech in the Senate as part of the hearing that he will hold together with Treasury Secretary Janet Yellen.

The Fed expects that “theinflation it will move significantly to the downside when the imbalances between supply and demand diminish “but – as Powell points out -” at the moment it seems that the factors driving up inflation will continue into the next year “.

Although the economy continues to strengthen and the job market to improve, the resurgence of Covid – notes Powell -, could “reduce the willingness of people to work face-to-face, slowing down the progress of the labor market and intensifying the difficulties in the supply chain”. The Fed chairman says “there is still a long way to go” before reaching full employment, one of the conditions set by the central bank before intervening on interest rates.

“The Fed – concluded Powell – is committed to achievingobjective of price stability and it will use all the tools at its disposal to support the economy and prevent high inflation from taking root. “

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risks economy inflation

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