Fed's Kashkari says Delta could throw wrinkle into taper plan

Minneapolis Federal Reserve Bank President Neel Kashkari poses during an interview with Reuters in his office at the bank’s headquarters in Minneapolis, Minnesota, U.S., January 10, 2020. REUTERS/ Ann Saphir/Files

(Reuters) – Minneapolis Federal Reserve President Neel Kashkari on Thursday said the highly transmissible Delta variant of the novel coronavirus could throw a “wrinkle” into the Fed’s plan to reduce its asset-purchase program if it slows the labor market recovery.

“If we see a very strong labor market this fall,” Kashkari said in a virtual appearance at the Midsize Bank Coalition of America, the U.S. job market improvement could meet the “substantial further progress” bar the Fed has set before it will start reducing asset purchases. But Kashkari said although he is “optimistic” for that outcome, fear of the virus could make people concerned about taking a job or chill the return to in-person school, slowing the jobs recovery.

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