A new strain of coronavirus may worsen the problem of inflation in the United States

Federal Reserve Chairman Jerome Powell suggested that the emergence of a new strain of Covid-19 «omicron» could exacerbate problems in supply chains. Which, in turn, contributed to a significant increase in inflation in the United States this year.

Powell believes that the spread of a new strain of coronavirus could put the Fed in a difficult position in the coming months, exacerbating the problem of inflation and limiting employment at the same time. The growing fears associated with the new strain will inevitably reduce the number of people willing to enter the workplace, and this will slow down the current recovery of the labor market and exacerbate problems in supply chains. 

Inflation, which was already at 5% in October (which significantly exceeds the regulator's target level of 2%), will also not stand still, the head of the Fed is sure. It is becoming difficult for producers to meet consumer demand due to problems in supply chains, while energy prices are rising, and all this is pushing up inflation.

However, many experts, including the Fed, are confident that by the middle of next year, inflation risks will gradually come to naught, as the problem of supply and demand imbalance will weaken.