The Fed chair says Omicron is a risk to the economy. Could that mean more stimulus checks?
The rise and rapid spread of the Omicron variant is already taking a toll on U.S. markets and has the World Health Organization on high alert. And that’s renewing demand for a fourth stimulus check among some people.
To date, nearly 3 million people have signed a Change.org petition calling for recurring $2,000 payments to adults and $1,000 payments for children, making it one of the platform’s most signed. And the Senior Citizens League continues to call for a $1,400 special stimulus to assist with cost-of-living adjustments.
But even with Omicron, the odds remain remarkably low, with lawmakers showing no appetite for a fourth round of checks.
The variant is certainly having a big impact in a short time. The World Health Organization has labeled it a “very high” global risk, saying that the “unprecedented number of spike mutations” in the variant could “impact the trajectory of the pandemic.” The [hotlink ignore=true]Dow[/hotlink] has lost roughly 700 points in the past two trading sessions on concerns over the virus, while the S&P index has dropped 54. And both markets were down sharply in early trading Tuesday.
Federal Reserve Chairman Jerome Powell, meanwhile, will tell the Senate today that Omicron could pose a risk to the economy.
“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,” he said in prepared remarks to lawmakers, released before his testimony. “Greater concerns about the virus could reduce people’s willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions.”
But the widespread availability of vaccines and a better understanding of preventative measures, such as wearing masks, means people aren’t actually confined to their homes. President Joe Biden, on Monday, said he saw no need for a new lockdown “for now…if people are vaccinated and wear their masks.”
State governments are also unlikely to provide additional payments, though some are still disbursing money to their citizens.
In Maine, for example, Gov. Janet Mills announced frontline workers who kept the state’s economy open during the pandemic will receive a one-time $285 relief check. More than 524,000 people are eligible for that bonus.
The Biden administration has historically downplayed talk of a fourth round of stimulus checks, pointing instead to the Child Tax Credit and the American Rescue Plan. Senate Democrats also seem reluctant to support the idea of a fourth check. In March, a group that included Elizabeth Warren and Bernie Sanders sent a letter to Biden supporting the idea of recurring payments and automatic unemployment insurance extensions.
Virtually nothing has been said about that proposal since then.
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