Policy makers should “get started” and begin to slow asset purchases even though the delta variant poses a risk to the U.S. economic outlook and to job growth, Federal Reserve Bank of Kansas City President Esther George said.
“The economy continues to grow at a strong rate,” George said, adding that in terms of the potential risk of the delta variant, “you can imagine that it might slow down some of the returns to the labor market. But I don’t expect at this point that it will derail the economy as we saw last year when we first had to deal with the virus.”
Yes, US GDP QoQ just checked in at a whopping 6.6% with personal consumption growing at 11.9% for Q2.
Of course, The Federal government and Federal Reserve have over stimulated the economy and financial markets. Compare the collected benefits (unemployment, pandemic, extended, etc.) compared to before Covid struck in March 2020.
And compare The Fed’s monetary stimulus since Covid struck in March 2020.
Although Esther George is not a voting member of the FOMC, I think she has a good point. There is too much monetary stimulus in the market.
Will the Open Market Committee heed George’s warning? Or will they treat her like Ohio State great Eddie George as just another voice?