Omicron variant will ‘dampen’ the economy: UBS managing director
UBS managing director and senior portfolio manager Jason Katz weighs in on the impact the omicron variant will have on the economy amid inflation and supply chain issues.
Federal Reserve Chairman Jerome Powell assured lawmakers on Wednesday that a move by the U.S. central bank to speed up its withdrawal of support for the U.S. economy should not disrupt the markets, one day after his comments precipitated a massive nosedive on Wall Street.
Powell told the Senate Banking Committee Tuesday that the Fed may accelerate its plan to reduce its monthly purchases of bonds and mortgage-backed securities, triggering a 650-point drop in the Dow. The market rebounded on Wednesday.
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"At this point, the economy is very strong, and inflationary pressures are high," Powell said on Tuesday. "It is therefore appropriate in my view to consider wrapping up the taper of our asset purchases, which we actually announced at our November meeting, perhaps a few months sooner."
FED TO TAPER BOND PURCHASES BY $15B A MONTH AS IT EXITS PANDEMIC-ERA POLICY
That could mean the Fed's bond-buying program ends sooner than expected, potentially leading to a faster-than-expected interest rate hike. The central bank has been purchasing $120 billion in bonds each month throughout most of the pandemic in order to keep credit cheap and stabilize the financial markets. In November, Fed officials announced plans to scale back the program by $15 billion a month, a timeline that would end the program by late June.