Jerome Powell says COVID variant clouds inflation, economic outlook

Federal Reserve Chair Jerome Powell says that the appearance of a new COVID-19 variant could slow the economy and hiring, while also raising uncertainty about inflation.

The recent increase in coronavirus cases and the emergence of the omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation," Powell says in prepared remarks to be delivered to the Senate Banking Committee on Tuesday. The new variant could also worsen supply chain disruptions, he added.

In the past two weeks, other Fed officials have said the central bank should consider winding down its ultra-low interest rate policies more quickly than it currently plans. They cite concerns about inflation that has jumped to three-decade highs.