Morgan Stanley Analysts ‘Not That Concerned’ About Omicron Variant, Worried About Federal Reserve Policy

( Analysts from Morgan Stanley have said that they aren’t so much concerned about the new “Omicron” variant of the COVID-19 virus, and are more concerned about the Federal Reserve’s expected withdrawal of monetary stimulus.

It comes after the Fed announced in October that, after almost two years of extremely aggressive quantitative easing following COVID-19 lockdowns, that it will taper the $120 billion in monthly bond purchased being made by $15 billion in November, and once again in December.

The Fed, however, has also been considering a much faster withdrawal of monetary aid given the recent rapid increase in inflation, and the fact that more people are returning to work.

In other words, things are about to get rocky. Who could have guessed that telling people to stay home for more than a year would have caused so much damage?…

According to a report from Fox, Morgan Stanley analyst Michael Wilson shared a note with clients explaining how they are “not that concerned about omicron as a major risk factor for equities.” The note warned, however, that there may be possible headwinds relating to the Federal Reserve’s withdrawal of economic support, explaining how tapering is “tightening for the markets” and that it will “lead to lower valuations like it always does at this stage of any recovery.”

Goldman Sachs has already begun revising its economic growth predictions, too, bringing down its 2022 economic prediction of 4.2% growth to 3.8% growth, citing uncertainty over the newest strain of COVID-19.

But let’s be honest here – even if the Democrats think that the pandemic is still raging, will they really be willing to cause yet more economic damage knowing that they’ll be punished for it in the 2022 midterm elections?

We have one year until then, and a lot of time for President Biden to pull his socks up and start reversing course. We’ll see…