US Federal Reserve chairman Jerome Powell says China’s strict ‘zero-Covid’ policy hinders global supply chain
- The top US central banker also says smaller interest rate increases are likely and could start as soon as the Federal Reserve’s meeting in December
- Prices of goods manufactured or assembled in China are affected when it has shutdowns in regions deeply connected to the world economy, Powell says
China’s stringent “zero-Covid” restrictions have affected the American economy by dragging on global supply chains, the top central banker of the United States said on Wednesday.
When China has shutdowns in regions that are deeply connected to the world economy, supply chains are “less efficient, less effective” and the prices of goods manufactured or assembled in the country are affected, said US Federal Reserve chairman Jerome Powell.
“It does have an implication for the US,” he said at an event where he gave a closely watched speech before policymakers enter a quiet period before the December 13-14 gathering on the next interest rate decision.
Still, Powell added that “it’s hard to say how big that will be without knowing how persistent, how long” the lockdowns will last.
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He spoke as signs increased that Beijing’s zero-Covid policy was taking a toll on the world’s No 2 economy, leading to weaker consumer demand, disrupted production and sluggish expectations.
