Busy Agenda Gets a Complication — New Covid Variants
Author: Greg Valliere
July 11, 2022
HEALTH OFFICIALS WORRY about an enormous surge of the BA.5 variant, which is highly contagious, just as most Americans have concluded — perhaps prematurely — that the virus has disappeared. It hasn’t.
SOME HEALTH CARE EXPERTS BELIEVE there could be 1 million new U.S. cases a week by late summer, the Washington Post reports this morning. Antibodies from vaccines and previous coronavirus infections offer limited protection against BA.5.
THE SEVERITY OF THIS VARIANT is unclear; U.S. hospitalizations have been rising for weeks but are still relatively low at 38,000, while fatalities have stayed stable at about 325 per day, far below levels in the past two years.
EXPERTS DON’T AGREE ON HOW LETHAL this variant is, but they do agree that the country seemingly doesn’t care; recommendations to voluntarily resume masking have fallen on deaf ears. “We’ve chosen, deliberately, to expose ourselves and make ourselves more vulnerable,” a health expert told the Post. Less than half of all Americans have received any booster shots.
MUCH IS UNKNOWN — will reinfections blast through booster shots? Will there be a winter Covid surge? The Food and Drug Administration has asked vaccine makers to come up with new formulas that target BA.5 and BA.4; those boosters could be ready by this fall.
WHILE VIRTUALLY ALL POLITICIANS DON’T WANT to even consider new restrictions, a leading politician has become a victim. Charles Schumer, the Senate Majority leader, tested positive this weekend, which could complicate his goal of moving quickly on two major new bills — one would provide funds for U.S. manufacturers of computer chips; another would allow for negotiations on prescription drug prices.
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THE BIG ISSUE FOR THE MARKETS THIS WEEK almost certainly will be new inflation data; the June CPI report, due on Wednesday, may show year-over-year prices rose by nearly 9%. This will get enormous media attention, as will Thursday’s PPI data. A 75 basis point rate hike from the Federal Reserve on July 27 is a very safe bet.
SOME COMMODITY PRICES may have leveled off, and Biden could have a positive meeting in Saudi Arabia on Friday, but any hopes for less aggressive Fed tightening will have to wait until the Sept. 20-21 FOMC meeting, when there will be more clarity on Ukraine, the economy and this new Covid wild card.
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