Embedded as a risk, new COVID cycle could challenge Fed, recovery

The daily pace of new infections has more than doubled since the Fed's June 16 policy meeting, when Chair Jerome Powell said that while it was "premature to declare victory" given the appearance of the more infectious coronavirus Delta variant, a decline in infections, hospitalizations and deaths "should continue."

"Do vaccinated people stay off airplanes? That is the downside risk," said Wells Fargo Corporate and Investment Bank Chief Economist Jay Bryson, who is so far maintaining a forecast of 7% economic growth this year. "I don't think any of us are expecting lockdowns like we saw a year ago. The population is not going to stand for that. But you don't have to have lockdowns. You just have to have people saying, 'I am staying home.

The Fed in June signaled it had begun planning a shift to post-pandemic monetary policy, with the risk of rising inflation seen as paramount and some policymakers ready to reduce the Fed's $120 billion in monthly bond purchases and accelerate eventual interest rate hikes.. The bank began its own bond "taper," only to see the country impose new lockdowns that economist feel will force the RBA to reverse course.

Daily deaths of around 200 are "tragic...but not out of proportion to other major health problems" such as auto accidents, said Dr. David Dowdy, associate professor of epidemiology at the Johns Hopkins Bloomberg School of Public Health. Among the core assumptions behind current Fed thinking, for example, is that a full reopening of in-person schooling this fall will free parents to resume work - a process that could now falter and slow the hoped-for recovery of nearly 6.8 million missing jobs.

Wells Fargo's Bryson said he is watching the United Kingdom, with vaccination rates similar to the United States and a large surge in recent infections, for signs of what may be coming.

Finance Finance Latest News, Finance Finance Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Australia cautions COVID-19 cases to rise despite weeks-long lockdownCoronavirus cases in Australia spiked again on Thursday, despite a weeks-long lockdown, with authorities warning that infections would rise more and take a toll on the economy as the country battles to contain the highly contagious Delta variant. thanks Yeah because all they have to do is turn up the cycles of amplification on the PCR test and they can make you idiots think you have anything renjujose byronkaye No - the failed lockdowns 'take toll' on business. Lockdown was never done, because it doesn't work. Obviously
Source: Reuters - 🏆 2. / 97 Read more »