Fed Chairman Jerome Powell is warning that Omicron, the latest COVID strain, could undo some economic growth our nation’s made within the last few months. He’s warning that the new variant could cause further rising inflation, a slow down in fixing unemployment, and increased issues with the supply chain crisis. In other news, Bridgewater Associates’ Ray Dalio is telling investors that cash is not a safe place right now. “Cash is not a safe investment, is not a safe place because it will be taxed by inflation,” he told CNBC’s “Squawk Box.”
CNN Business/David Goldman
Omicron poses 3 major threats to the US economy, says Jerome Powell
Here we go again. Federal Reserve Chairman Jerome Powell is set to testify Tuesday that the Omicron variant threatens America’s economic recovery.
Much remains unknown about Omicron. Yet if it prolongs the pandemic, it could keep prices rising, hurt job growth and make the supply chain crisis worse.
“The recent rise in Covid-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation,” Powell wrote in prepared testimony he’s set to deliver Tuesday to the Senate Committee on Banking, Housing, and Urban Affairs.
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Kitco News/Jim Wyckoff
Gold price firmer as risk aversion quickly resurfaces
Gold and silver prices are higher in early U.S. trading Tuesday, on safe-haven demand and more short covering by futures traders. “Risk-off” trading and investing attitudes have returned to the general marketplace after a one-day respite Monday. February gold was last up $9.70 at $1,794.90 and March Comex silver was last up $0.043 at $22.895 an ounce.
Global stock markets were mixed to lower in overnight trading. The U.S. stock indexes are pointed to lower openings when the New York day session begins. Risk aversion is keener Tuesday as there are still major unknowns regarding the new Omicron strain of the coronavirus, including how effective current vaccines are at fighting it. Regeneron Tuesday morning said its antibody drug is less effective on the Omicron strain. Moderna said Omicron’s many mutations suggest a new vaccine will be needed.
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Ray Dalio says cash is not a safe place right now despite heightened market volatility
Bridgewater Associates’ Ray Dalio stood by his belief that cash is not the place to be despite the volatility in the markets triggered by the new omicron Covid variant.
“Cash is not a safe investment, is not a safe place because it will be taxed by inflation,” the founder of the world’s biggest hedge fund said Tuesday on CNBC’s “Squawk Box.”
During turbulent times, it’s also important to be in a safe, well-balanced portfolio, the billionaire investor said.
“You can reduce your risk without reducing your returns. You will not market-time this. Even if you were a great market timer, the things that are happening can change the world, so it changes what could be priced into the market,” Dalio said.
Keep reading, here.