A top Federal Reserve official has warned that the Omicron coronavirus variant threatens to fuel soaring inflation in the US by putting further pressure on supply chains and worsening worker shortages.
“If it turns out to be a bad variant it could exacerbate the upward price pressures we’ve seen from the supply-chain problems,” Loretta Mester, president of the Cleveland Fed, told the Financial Times in an interview on Thursday.
Mester added there was a risk that if Omicron were “more virulent than Delta” then people who lost or quit their jobs during the pandemic would continue to stay at home. “The fear of the virus is still one of the factors holding people back from re-entering the labour force,” she said.