Yellen: Omicron ‘could cause significant problems’ for global economy

Treasury Secretary Janet Yellen answers questions during a House Financial Services Committee oversight hearing of the Treasury Department's and Federal Reserve's Pandemic Response on Wednesday, December 1, 2021.
Greg Nash

Treasury Secretary Janet Yellen said the omicron coronavirus variant “could cause significant problems” for the global economy.

“Hopefully it’s not something that’s going to slow economic growth significantly,” Yellen said at the Reuters Next conference on Thursday, Reuters reported. “There’s a lot of uncertainty, but it could cause significant problems. We’re still evaluating that.”

Global markets tanked after detection of the omicron variant was announced last week, with the Dow Jones Industrial Average falling by 900 points.

The new variant, which has already led some countries to impose international travel bans, could make supply chain issues and inflation worse, according to Yellen.

However, it could also slow the growth of the U.S. economy, which would ease some pressures on inflation, Yellen noted. 

Yellen said the rise in inflation stems largely from the coronavirus pandemic and “somewhat” from President Biden’s American Rescue Plan, according to Reuters.

Omicron cases have been detected in multiple U.S. states on Wednesday and Thursday, spurring conversation about new coronavirus restrictions. 

President Biden has signaled that he does not plan to call for any closures or restrictions on businesses, schools or other in-person gatherings in response to the new variant.

“We are going to fight COVID-19 not with shutdowns or lockdowns — but with more widespread vaccinations, boosters, testing and more. We will beat it back with science and speed, not chaos and confusion — just as we did in the spring and again with the more powerful delta variant in the summer and fall,” Biden wrote in an op-ed Thursday.

Tags American Rescue Plan Act COVID-19 pandemic COVID-19 variants Inflation Janet Yellen Joe Biden omicron Supply chain crisis

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