Powell Said Omicron Poses A Downside Risk To The U.S. Economy

Powell will attend the hearing of the US Senate Banking Committee on Tuesday. According to the committee’s pre-reported speech, Powell mentioned Omicron for the first time, stating that the virus poses a downside risk to employment and economic activities and makes the outlook for inflation uncertain. This means that Omicron may affect the Fed’s dual goal of achieving stable prices and full employment. In addition, Powell pointed out that the evolution of the virus may hit people's willingness to work, slow down the recovery of the labor market, and exacerbate bottlenecks in the supply chain. The speech reflects that the Fed has a high degree of attention to the Omicron new crown variant virus.