FT News Briefing The markets shrug off Omicron
Dec 10, 2021
US consumer prices are set to rise at the fastest rate in nearly four decades, igniting discussions about the economy. Meanwhile, investors seem unfazed by the Omicron variant, prompting a deep dive into market reactions and challenges faced by central banks. In labor news, Starbucks employees make history by unionizing, reflecting broader trends in corporate accountability. The episode also touches on the Sackler name's removal from art galleries, showcasing shifts in cultural legacy amid economic turbulence.
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Accelerated Monetary Tightening
- The Federal Reserve (Fed) is expected to end pandemic asset purchases sooner than initially projected, likely by March.
- Economists predict the first interest rate increase could come earlier than the third quarter, possibly even in the first quarter of the year.
Market Resilience to Omicron
- Markets quickly rebounded from the initial shock of the Omicron variant.
- Investors now expect shorter, sharper shocks from pandemic news, demonstrating a faster return to normal.
Omicron's Perceived Mildness
- Investors are less concerned about Omicron's severity due to potentially milder symptoms.
- The biggest fear is a variant that necessitates another full shutdown, which Omicron doesn't appear to be.