White House Expects Economy to ‘Largely Power Through’ Omicron

(Bloomberg) -- Existing vaccine protections should help the U.S. “largely power through” the emergence of the omicron coronavirus variant and avoid additional lockdowns, White House Council of Economic Advisers chairwoman Cecilia Rouse said Tuesday.

While the White House awaits more information about the variant’s transmissibility and severity -- as well as vaccine efficacy -- the country is “not in the same place we were a year ago,” Rouse said at the Wall Street Journal’s CEO Council.

“I don’t anticipate lockdowns, I don’t anticipate that we’ll have to retreat to our corners,” she said.

The emergence of the variant, first detected in southern Africa, has rattled financial markets in recent weeks as scientists have warned it could prove more adept at evading vaccine protections. But markets rebounded on Monday amid indications that the new variant may be milder than predecessors.

White House economists also believe that a waning pandemic and administration efforts to address supply-chain constraints will help inflation to “ease over the coming year,” Rouse said.

She said while she was not sure inflation rates would fall to the Federal Reserve target of 2%, “I do expect it to be about half” of current levels. The Consumer Price Index rose 6.2% in October compared to the same month in 2020, the sharpest increase in more than three decades.

Rouse conceded that the pandemic had created a “challenge” for forecasting, and said the White House had erred in some of its early projections.

“We anticipated that the market would be more open,” Rouse said.

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