Remarks by Cleveland Fed president, Loretta Mester, in an interview
- Omicron could exacerbate supply chain crunch, worker shortages
- If it turns out to be a bad variant, it could exacerbate price pressures
- The fear of the virus is holding people back from reentering the labour force
- But the economy is getting better at dealing with variants
- The demand side effects have been lessened
- Would support a quicker tapering process
- That would give the Fed optionality when it comes to moving on rates
- At least one or two rate hikes next year would be "appropriate"
- Full interview (may be gated)
I think it says a lot about how the Fed is feeling right now when they're using omicron as a segue into tightening policy because it may fuel further inflation pressures.
I mean in theory, they're not wrong but it also speaks volumes to how the US has "moved on" from the pandemic in general I guess.
