Jerome Powell Says Omicron Adds Economic Risks, Inflation Uncertainty
“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.”
Euro-Area Inflation Tops All Forecasts With Record 4.9%
“Euro-area inflation surged to a record for the era of the single currency and exceeded all forecasts, adding to the European Central Bank’s challenge before a crucial meeting next month on the future of monetary stimulus. Consumer prices rose an annual 4.9% in November, topping all 40 predictions in a Bloomberg survey of economists, where the median was for 4.5%. A measure that strips out volatile components such as food and energy also reached a record. The euro and bond markets were little changed after the publication of the data.”
China’s Manufacturing Rebounds With Signs Inflation Easing
“China’s factory sentiment improved in November after a power crunch subsided and price pressures eased, helping to underpin an economy that’s being hit by a property slump. The official manufacturing purchasing managers index rose to 50.1, the first time in three months it exceeded the 50 mark that signals an expansion in production. The non-manufacturing gauge, which measures activity in the construction and services sectors, fell slightly to 52.3. Both measures beat economists’ expectations.”
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