Press conference exchange between HOWARD SCHNEIDER and Fed Chair Jerome Powell:

user: Thanks, as usual. So I guess I gotta ask about the elephant in the room, which is the Omicron variant. You know, this seems to already be pushing one of your colleagues, the Bank of England, off its course. Things have evolved very fast there. Hasn’t quite hit the shores of the U.S. in full force yet. But people seem to expect it to. So I’m wondering, in your feelings about this, are you convinced that this is going to be perhaps a more infectious, but less serious, variant of the virus? Or are you simply confident that the U.S. economy can continue its divorce from the pandemic?

assistant: Well, I think there’s a lot of uncertainty, which is why we—why we called it out in our statement, our postmeeting statement, as a risk. It’s—we, we follow the same experts and I—we, we talk privately to the same experts that everyone else does and read the same articles in the paper and the same research and, you know, so the—you mentioned the early assessment is highly transmissible, perhaps not as severe, some continuing protection from, from existing vaccines and also existing immunity from having had the disease. That’s a first draft. We’re a long way from knowing what it will turn out to be. It may well come to the United States and replace Delta as the dominant variant fairly quickly. That could easily happen. I think there’s another step there, though—which is what’s going to be the effect on the economy. And that will depend, you know, on how much it suppresses demand as opposed to suppressing supply. It is not clear how big the effects would be on either inflation or growth or hiring on top of what’s already going on, which is quite a strong, you know, wave of Delta that’s hitting large parts of the country across the northern United States and all the way to the eastern seaboard and now coming down. We’re having quite a wave of Delta. So coming in on top of that, again, it’s very difficult to say what the economic effects would be. I do think, wave upon wave, people are learning to live with this. More and more people are getting vaccinated. So vaccinated people who get the new variant, it affects them much less than it tends to affect, in the aggregate, people who are not vaccinated. So the more people get vaccinated, the less the economic effect. It doesn’t mean it won’t have an economic effect. Delta had an effect of slowing down hiring. And it actually—it had an effect on global supply chains. And that sort of—that hurt the process of the global supply chains getting worked out. So it can have an economic effect. I just think, at this point, we don’t know much. We’ll know a whole lot more in three weeks, and we’ll know more than that in six weeks.

user: But if I can follow up: You’re clearly, from a risk standpoint, comfortable putting away one of your tools pretty soon. Which implies that whatever Omicron brings, you’re comfortable the economy can handle it without quantitative easing.

assistant: Yes. Yes, look, I think—if you look at the state of the economy and the amount—the strength of demand, the strength of just overall demand, and the strength of demand for labor, look at inflation, look at wages. I think moving, you know, moving forward the end of our taper by a few months is really—is really an appropriate thing to do. And I think, really, Omicron doesn’t really have much to do with that.