Amid everything else, omicron is poised to further disrupt already fragile supply chains as quarantines and illness prevent some employees from going to work.
Shelves displaying meat are partially empty as shoppers makes their way through a supermarket on Jan. 11, 2022, in Miami, Florida. The coronavirus Omicron variant is still disrupting the supply chain causing some empty shelves at stores. U.S. consumer prices soared last year by the most in nearly four decades, illustrating red-hot inflation that sets the stage for the start of Federal Reserve interest-rate hikes as soon as March.
The increase in the CPI was led by higher prices for shelter and used vehicles. Food costs also contributed. Energy prices, which were a key driver of inflation through most of 2021, fell last month. Market expectations for Fed tightening expected in March and 2022 as a whole were largely unchanged after the report. Yields on 10-year Treasuries fluctuated while S&P 500 futures maintained gains and the dollar extended its decline on the day.
“What we have now is a mismatch between demand and supply. We have very strong demand in areas where supply is constrained, particularly around goods, particularly around things like cars,” Fed Chair Jerome Powell told the Senate Banking Committee on Tuesday.