The United States named a new threat to the economy

The Fed said that the omicron strain of coronavirus could lead to an increase in inflation in the United States

the US economy and provoke a sharp rise in prices in the country. This scenario was named by the head of the US Federal Reserve Bank of Cleveland, Loretta Mester, in an interview with the Financial Times.

According to a spokesman for the US Federal Reserve System (FRS), the new strain of coronavirus, in addition to a sharp rise in inflation, could worsen the situation with a shortage of workers and create additional pressure on global supply chains. If the omicron strain is more dangerous than the delta strain, those people who lost their jobs or quit during the pandemic will continue to stay at home. “Fear of the virus continues to be one of the factors holding people back from returning to the labor market,” Mester said.

However, she is confident that the new strain of the virus will not have a devastating effect on the country's economy if vaccination proves to be an effective means of combating it. “The economy will outlive this variant of the virus better. Some of the problems from the increased demand have been resolved, but we are still seeing a number of supply problems associated with the virus, ”said a Fed spokeswoman. Next year, Loretta Mester will become a member of the Federal Open Markets Committee of the US Federal Reserve with the right to vote, it is this department that will determine US economic policy in the near future, the newspaper notes.

In early December, US Federal Reserve Chairman Jerome Powell made it clear that fighting inflation is the top priority of the US financial regulator. He also noted that the spread of the omicron strain of the coronavirus could lead to a decrease in the level of economic activity in the United States. “The increase in the incidence of coronavirus and the emergence of the omicron strain can lead to a decrease in employment, economic activity and increased inflation,” – said Powell in a statement released by the department. Similar factors driving inflation may persist in 2022.

At the same time, US President Joe Biden is confident that the country's economy is resistant to such stresses. He stated that the efforts of the US government have helped to reduce problems with disruptions in supply chains in the country, as well as to cope with the consequences of record increases in commodity prices. He is confident that inflation will fall in the US soon. “We are entering the holiday season in very good shape,” he stressed. At the same time, Biden urged not to rush to assess how the emergence of the omicron strain of coronavirus could affect the state of logistics, clarifying that he is an optimist on this issue.

According to Biden, an independent economic analysis previously showed that his the Build Back Better bill will also help reduce inflationary pressures on the economy, despite the fact that the administration of former US President Jimmy Carter in 1970-1980 failed in a similar situation. Biden's $ 1.75 trillion bill is an ambitious infrastructure plan that includes funding for industry, agriculture, electricity, and transportation and social services. On November 19, the US House of Representatives sent it back to the Senate for approval.