Powell becomes more “Dove” with Omicron …

The Omicron variant entered the markets like a bulldozer, wanted or not: oil, energy, as well, raw materials that go up and down. insane inflation and production costs. However, the operator who should define monetary policy, and much of the economic one, can use it to change their monetary positions.

The remarks by Fed Chairman J erome Powell prior to the Coronavirus and CARES Act hearing before the Committee on Banking, Housing, and Urban Affairs, offered some insight into his upcoming US Central Bank actions, and came after Omicron, but also after some “Aggressive” positions of other operators in the sector.

Here is the key paragraph of his intervention:

The recent rise in COVID-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation.

Increased concerns about the virus could reduce people's willingness to work in person, which would slow progress in the labor market and intensify supply chain disruptions.

This uncertainty can only mean one thing when it comes from the Fed, namely that the much anticipated "Taper", that is the end of soft monetary policies, is being postponed to a more peaceful future, when perhaps there will be no more Omicron , or some other threatening variant.

Which is strange because, according to a flash survey by DB, only 10% of stock traders believe Omicron will be a problem between now and the end of the year.

So we could also have a continuation of the expansionist policies of the Fed, which will certainly have positive effects on the markets, now inflated into a huge bubble.

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The article Powell becomes more "Dove" with Omicron … comes from ScenariEconomici.it .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/powell-diventa-piu-colomba-con-la-omicron/ on Tue, 30 Nov 2021 11:00:23 +0000.