In his prepared testimony to be presented to the Senate Banking, Housing and Urban Affairs Committee, Powell warns that the new coronavirus strain could be a drag on jobs and economic growth and add to uncertainty over inflation.
The omicron variant could make people more hesitant about in-person work, Powell says, warning that could slow the recovery in the job market and “intensify” supply-chain disruptions.
Inflation is already at its highest level in more than three decades. Powell, who was recently reappointed for a second four-year term as Fed chair by President Biden, says those price pressures are still expected to ease in the coming year, but that it’s difficult to predict exactly when.
The new omicron variant was first identified in South Africa and has been found in more than a dozen countries since then. So far, there have been no cases seen in the U.S.
Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen are set to testify this morning before a congressional committee to discuss economic recovery from the pandemic amid new uncertainty about the omicron variant.