New York Fed President John Williams said in an FT interview that Omicron “adds a lot of uncertainty to the outlook”. It will “will continue that excess demand in the areas that don’t have capacity, and will stall the recovery in the areas where we actually have the capacity.” That would mean a “somewhat slower rebound overall” and “increase those inflationary pressures, in those areas that are in high demand.”
As for monetary policy, “the question is: Would it make sense to end those purchases somewhat earlier, by maybe a few months, given how strong the economy is?” he said. “That’s a decision, discussion, I expect we’ll have to grapple with.”
