The Fed plans to start tapering bond purchases this year, a short-term gas price hike but few long-term disruptions are expected due to Hurricane Ida, manufacturers stockpile partially completed goods amid supply shortages, and another Connecticut county entering a high transmission category for COVID-19 risk are among the top business news items this morning.
National
Federal Reserve Chairman Jerome Powell says the central bank is likely to start cutting back its bond purchases before the end of the year. However, Powell also indicated that rate hikes won’t occur until considerably later.
A short-term spike in gasoline prices is likely after Hurricane Ida forced the shutdown of the bulk of Gulf Coast oil production. Refining capacity could also see longer term disruptions from flooding and power outages caused by the storm.
Economists are forecasting that Hurricane Ida will have a muted effect on the U.S. economy overall, although its impact will be felt more in certain sectors such as energy and shipping. They expect that the storm will deal a greater blow if damage to the energy sector is severe enough to cause a prolonged shutdown of refineries and corresponding long-term jump in energy prices.
Business trends
Several manufacturers are stockpiling partially completed products as a shortage in available parts keeps them from reaching full capacity. Supply shortages have been affecting the industry for several months now, and company leaders expect the situation to persist at least into the fall.
Connecticut
Tolland County has been upgraded to the “high transmission” category for COVID-19, leaving Windham County as the only Connecticut county in the “substantial transmission” category. The Connecticut Department of Public Health is recommending that all residents ages two and up wear masks in indoor public places, regardless of their vaccination status, due to the higher COVID-19 risk posed by the Delta variant.
