(Bloomberg) -- Federal Reserve Chair Jerome Powell, in his first public remarks on the omicron variant of the coronavirus, said it poses risks to both sides of the central bank’s mandate to achieve stable prices and maximum employment.
“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,” Powell said in prepared testimony released Monday, a day ahead of his appearance before the Senate Banking Committee. “Greater 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.”
Powell, in the relatively brief text, didn’t discuss specific monetary policy actions or the possibility of changing the pace of the tapering of its asset purchases -- a key issue that other officials have flagged in recent remarks.
Powell -- who a week ago was selected by President Joe Biden for a second term as central bank chief -- will appear before the panel Tuesday at 10 a.m., together with Treasury Secretary Janet Yellen, in the first of two days of congressional oversight hearings related to pandemic stimulus. The House Financial Services Committee will follow with a separate hearing Wednesday.
U.S. central bankers are grappling with fresh uncertainty over the economy following the discovery of the new variant of Covid-19. Governments around the world stepped up restrictions on travel and the World Health Organization warned that the omicron strain could fuel a fresh surge in infections.
Despite strong job growth this year, “there is still ground to cover to reach maximum employment for both employment and labor force participation, and we expect progress to continue,” Powell said, adding that joblessness continues to fall “disproportionately” on Blacks and Hispanics.
©2021 Bloomberg L.P.