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AP

Powell: New virus variant clouds economic outlook

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Federal Reserve Chair Jerome Powell says that the appearance of a new coronavirus variant could slow the economy and hiring, while also raising uncertainty about inflation. The recent increase in delta cases and the emergence of the omicron variant "pose downside risks to employment and economic activity and increased uncertainty for inflation," Powell said to the Senate Banking Committee Tuesday. The new variant could also worsen supply chain disruptions, he said. Powell's comments come after other Fed officials in recent weeks have said the central bank should consider winding down its ultra-low interest rate policies more quickly than it currently plans. They cited concerns about inflation, which has jumped to three-decade highs. Yet Powell's remarks suggest that the additional uncertainty raised by the omicron variant may complicate the Fed's next steps.

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