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Omicron Will Cause Problems, but Inflation May Not Be One
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Federal Reserve policy makers worry that the Omicron variant could exacerbate companies’ supply-chain and hiring problems, pushing up prices as a result. The actual outcome could be different.
The pandemic brought on imbalances between supply and demand that have been remarkably persistent. Covid-19 concerns and containment efforts around the world slowed the production of necessary components, disrupted shipping activity and pushed people out of the labor force. At the same time, they sparked a jump in demand for goods that was intensified by several rounds of government relief.
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