The Omicron variant is spreading across the globe and health officials are watching closely. Here's what it could mean for interest rates. (iStock)
The COVID-19 Omicron variant has been classified by the World Health Organization (WHO) as a "variant of concern," with the agency saying it could take several weeks before the global risk can be determined. Health officials will see if the new mutation has increased transmissibility or is more lethal than previous variants, such as the Delta variant.
The WHO said the Omicron variant was first detected in South Africa and early infections were found in younger people. Since then, new cases have spread to several other countries around the globe. As concerns over the new variant grow, some wonder how the Federal Reserve will react to the economic uncertainty.
In its latest Federal Open Markets Committee (FOMC) meeting minutes from the November meeting, the Fed outlined its plans to begin raising interest rates in the near future as the economy emerges from the pandemic. However, it noted that the coronavirus and its variants continue to create economic risk. You can take advantage of today’s low rates by refinancing your private student loans and reducing your monthly payments. Visit Credible to find your personalized rate and see how much you could save.
Biden says Omicron variant cause for concern
In a speech Monday, President Joe Biden said the Omicron variant does give "cause for concern" but cautioned against panicking.
"While it will be a few weeks before we know everything we need to know about how strong the existing vaccines protect against the new variant, Dr. Fauci is with me today, or our medical team, and believe that the vaccines will continue to provide a degree of protection against severe disease," Biden said.
Biden said he remains hopeful that today’s current vaccines will be effective against the new variant but said his administration is preparing to assist with new vaccines and boosters if they are not. Biden also issued travel restrictions for several southern African countries where the Omicron cases were found.
"In the event, hopefully unlikely, that updated vaccinations or boosters are needed to respond to this new variant, we will accelerate their development and deployment with every available tool," Biden said.
With concern growing, it could trigger an initial reaction from the economy. However, long-term effects could be seen after more details about the latest variant become clear.
If you want to take advantage of low interest rates now before any potential economic disruption caused by the new COVID-19 variant, you could consider taking out a personal loan to consolidate high-interest debt. Visit Credible to compare multiple lenders at once and choose the best personal loan for you.
Strategy for COVID-19 Omicron variant won’t include lockdowns, administration says
Biden announced that the White House will release its updated strategy to fight COVID-19 this winter but said it will not include "shutdowns or lockdowns." The administration said it plans to double down on vaccinations and booster shots, testing and more.
"As additional protections, please wear your mask when you are indoors in public settings around other people," Biden said. "It protects you, it protects those around you. We do not yet believe that additional measures will be needed."
With no economic shutdowns being planned, it is less likely that interest rates will be impacted significantly. Currently, the Federal Reserve is planning to raise rates next year and could continue on that track if the Omicron variant does not significantly disrupt the economy beforehand.
If you want to take advantage of low interest rates, you could consider refinancing your mortgage to lower your monthly payment. Contact Credible to speak to a home loan expert and get all of your questions answered.
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