The spread of the Delta coronavirus variant and low vaccination rates in some parts of the world poses a threat to global recovery.
This is what a top Federal Reserve official is saying while she urges caution in removing monetary support for the US economy.
“I think one of the biggest risks to our global growth going forward is that we prematurely declare victory on Covid,” Mary Daly, the president of the Federal Reserve Bank of San Francisco, says.
In an interview with the Financial Times, she adds, “We are not through the pandemic, we are getting through the pandemic.”
Daly points to the struggles to contain the virus in Japan and other countries.
“If the global economy . . . can’t get . . . higher rates of vaccination, really get Covid behind [us], then that’s a headwind on US growth,” Daly believes.
“Good numbers on the vaccinations are terrific, but look at all the pockets where that isn’t yet happening.”
While the U.S. seems on track to contain the virus, other countries are seeing a surge in infections and lagging inoculation campaigns.
These are constraining the economic rebound and could have negative ramifications for the US altogether.
On the vaccination campaign in the U.S., Daly says it is too early to claim victory against COVID-19.
“I think there’s always this excitement that ‘Oh my gosh: look, the vaccinations are working, this could be the end’. But it would be premature to say that we’ve achieved a victory here.”
