The US Federal Reserve officials used to believe that the Delta variant of COVID-19 carried limited risk to the economy and hinted at rapid stimulus tapering. Currently, it is the main reason for the Fed’s legendary annual Jackson Hole symposium taking place online.
The central bank had to admit the gravity of the situation and adjusted the summit’s format to the pandemic reality. Besides, it is obvious that the coronavirus contagion rate is higher than the central bank authorities had expected. Notably, most of them had already planned to start stimulus programs tapering by the end of this year. However, the Delta variant is likely to adjust that strategy. The Oxford Economics analysts write that increased consumer caution has led to the lowest demand and mobility in some weeks. They add that employment and production are down owing to the accelerated spread of the Delta variant. It is impossible to wind down stimulus measures in this situation.
Despite the US economic growth surpassing pre-pandemic levels in the second quarter, some indicators now signal possible difficulties that may undermine confidence in the economy. Rates of coronavirus cases are rising, small businesses are hiring less employees, spending on recreation and entertainment is down. Moreover, consumer sentiment has deteriorated sharply, hitting a decade low in August. Now the symposium has been held online, too.
