Minneapolis Federal Reserve Bank President Neel Kashkari told Face the Nation last Sunday that if you’re worried about keeping the economy open and growing, you’d better go get your shots:
JOHN DICKERSON: Let’s start with the Delta variant. What effect do you think it’s having on the economy?
KASHKARI: Well, it’s really- it’s creating a bunch of caution. Right now, we have seven to nine million Americans who are still out of work that we need to get back into the job market. We believe that they’re out of work because they’ve been nerve- nervous about COVID, because of childcare issues, because of these enhanced unemployment benefits. So I was very optimistic the fall would be a very strong labor market with many of those Americans coming back to work. That’s still my base-case scenario. But if people are nervous about the Delta variant, that could slow some of that labor market recovery and therefore be a drag on our economic recovery. So the sooner we can get people vaccinated, the sooner we can get Delta under control, the better off our economy is going to be [Neel Kashkari, interviewed by John Dickerson, CBS: Face the Nation, 2021.08.01].
Kashkari notes that our current inflation looks dramatic only because prices are bouncing back from declines last year; over a two-year period, Kashkari says “inflation is around 2.3 or 2.4%.” But if you’re really worried about inflation, again, you should be getting your shots to beat back the coronavirus delta variant and telling everyone else who participates in the supply chain to do the same:
JOHN DICKERSON: What is your feeling then about the CEO of Intel said because of the microchip shortage, things might not get to normal until 2023? This week, Anheuser-Busch said Budweiser is going to- is having trouble because of supply issues. Caterpillar, the heavy equipment manager, is worried about it. Procter and Gamble said they’re going to cost- it’s about $2 billion in additional costs. These are a lot of sectors- the housing sector is having trouble because of supply issues. Those are a lot of different sectors that seem to be having issues with supply. Isn’t that an inflation worry?
KASHKARI: It is an inflationary worry, but I think in most of those cases, the expectation is those supply chain issues are going to get worked out. Remember a year ago we couldn’t get toilet paper. Now, if you go to the grocery store, the shelves are full of toilet paper. Lumber prices skyrocketed. Now they’re falling back down to earth. So these price increases are real. I’m not dismissing that. But a lot of the supply chain issues, I mean, this is the market at work as businesses are trying to work out their- their issues and become more efficient. And this is why it goes back to the virus as the Delta variant is spreading around the world, it’s creating issues all around the world in a lot of our global suppliers. So the more we can do to get control of the Delta variant, the more quickly we’re going to be able to resolve many of these supply chain issues [Kashkari/Dickerson, 2021.08.01].
Get your shots—it’s the economic thing to do!