By Alexander Gu
The new delta variant of COVID-19 is disrupting the global economy. In the US, the delta variant has already caused some messy days on Wall Street. The chairman of the Fed, Jerome Powell, is holding a news conference about the effects of the delta variant on the economy after a meeting of the Fed’s policy committee. White House officials are closely monitoring the variant, but have not yet seen any evidence that it is slowing the recovery. They see no need to give stimulus checks as part of fiscal policy.
The delta variant has also affected many global supply chains, especially those starting in Asia. There have already been ripples affecting the US, including a shortage of computer chips. Many Asian countries that are already behind the curve on giving vaccinations are putting in lockdowns to stop the spread of the variant. “We had already expected that semiconductor shortages would continue into 2022, and that’s virtually assured now,” said Sara Johnson, the executive director of global economics for IHS Markit.
A supply issue closer to home is the risk for US laborers. There has already been a lack of labor, and if the new delta variant can infect even those that are already vaccinated, the shortages are likely to worsen. Fortunately, the demand of the average American consumer has not been affected. In fact, the consumer confidence index has risen slightly.