US inflation will remain high for next year as well
“Inflation will remain high also in the next year, with prices that have not been seen for three decades ”this is the summary of the testimonies of the president of the Federal Reserve Jerome Powell (just reconfirmed in office by Joe Biden) and del Treasury Secretary Janet Yellen in the monthly meeting with the “Committee on Banking, Housing and Urban Affairs” of the United States Congress. All this in contradiction with what the President said Joe Biden about inflation that should have been transient and painless. But this time not even the President could have imagined the arrival of the Omicron variant of the Coronavirus, forcefully and suddenly inserted in the American economic scenario.
US, high inflation also for the Omicron variant
The Fed’s number one confirmed that, precisely due to the persistence of Omicron in the country and the uncertainty that this new risk carries with it, inflation will continue into the next year as well. Powell, as well as his boss in the lead, Joe Biden, he had to backtrack on some of his earlier statements. After repeating for months that the increase in prices was caused only by completely transitory reasons, the head of the Fed was very precise “It is probably time to stop using the word transitory. The risks of more persistent inflation have increased. ” “All this, first of all inflation-Powell continued– does not exclude risks for the labor market and for the economy in general. The consistent increase in Covid-19 cases and the appearance of the omicron variant places us in front of a more complicated scenario for employment and economic activity in general “.
US, Wall Street indices drop by more than one point
While not giving precise indications Powell he said all signs indicate that inflation will remain high in 2022 as well Wall Street response to the words of the president: the indices immediately lost more than one point. Fears of new increases in contagion are slowing down the recovery of the labor market and are critically reflecting on the normal activities of the supply chains. “The greatest concern for the new variant of the virus it could reduce the number of people willing to work in person. This would slow down good progress in the labor market and could increase disruptions to supply chains. “
US, full employment two years ahead
A few words of optimism then came from Janet Yellen who recalled how, despite the unexpected phenomenon of numerous resignations of workers, the trend of the labor market in the United States continues to improve. “We have reached full employment two years ahead of schedule”. But this was not enough to reassure either the members of the Commission, nor the Americans bombarded with worrying news, such as the latest statements by the CEO of Moderna. Sthefan Bancel in fact stated that “Vaccines will struggle to counter the new variant and it will take months to develop new ones“. A statement that has brought down the indices again and worried the world, especially the Western one, engaged in administering the third dose.
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