Economic and interest rate forecasts are on hold until more information about the omicron variant is available.

The data released last week was very strong across the board. Incomes rose and demand increased at a faster pace than the third quarter. At the same time, inflation continued to accelerate with the core PCE price index up 4.1% on a YOY basis. The October data reflected a very strong start to the fourth quarter. None of this mattered to investors. The emergence of a new covid variant identified last week raised the risk of drastic measures to combat the spread. The omicron variant appears to be transmitted much faster than the delta variant with cases being reported around the world. It is too soon to determine whether this new variant is subject to control with existing vaccines and treatments or whether the resulting illnesses are as severe as past virus.