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WASHINGTON -- The spread of the COVID-19 delta variant is raising infections, leading some companies and governments to require vaccinations and raising concerns about the U.S. economic recovery.
But on Wednesday, Federal Reserve Chair Jerome Powell injected a note of reassurance, suggesting that the delta variant poses little threat to the economy, at least so far.
"What we've seen is with successive waves of COVID over the past year and some months now," Powell said at a news conference, "there has tended to be less in the way of economic implications from each wave. We will see whether that is the case with the delta variety, but it's certainly not an unreasonable expectation."
Powell spoke after the Fed ended its latest policy meeting in which it it signaled, for the first time since the pandemic began to ease, that the economy is moving closer to the "substantial further progress" it wants to see before reducing the $120 billion in Treasury and mortgage bonds it is buying each month -- purchases that are intended to lower rates on longer-term consumer and business loans to spur more borrowing and spending.
A reduction in those purchases would represent the start of a gradual pullback in the Fed's support for the economy. Only after the bond purchases had been pulled back is the Fed expected to begin considering raising its benchmark interest rates from zero, where it's been since the pandemic erupted in March last year.
At his news conference, Powell acknowledged that the quickening spread of the highly contagious delta variant was threatening some areas of the nation where vaccinations are low, and he noted that "some forecasts are for them to rise quite significantly."
And he said that as the virus spreads, some consumers might pull back from the spending that has propelled the rapid rebound from the pandemic recession.
"Dining out, traveling, some schools might not reopen," he said. "We may see economic effects from some of that or it might weigh on the return to the labor market. We don't have a strong sense of how that will work out, so we'll be monitoring it carefully."
But Powell noted that last summer's wave of infections had inflicted less damage to the economy that many analysts had forecast.
"We've kind of learned to live with it, a lot of industries have kind of improvised their way around it," Powell added. "It seems like we've learned to handle this."
The statement the Fed issued after its latest policy meeting said that ongoing vaccinations were helping to support the economy. But it dropped a sentence it had included after its previous meeting that said those vaccinations have reduced the spread of COVID-19.
The central bank is keeping its benchmark short-term rate pegged near zero, where it has remained since the pandemic tore through the economy in March 2020.