Yellen warns Omicron variant could pose 'significant' risk to global economy

US authorities have confirmed at least two cases of the Omicron variant

The Omicron variant could pose a "significant" risk to global economy’s ongoing recovery from the COVID-19 pandemic, Treasury Secretary Janet Yellen said Thursday.

Yellen noted the variant’s economic impact was still "very uncertain" and the subject of ongoing analysis. But she warned the variant’s spread could exacerbate supply chain issues and an ongoing inflation crisis that has hampered the economic recovery in recent months.

"Hopefully it’s not something that’s going to slow economic growth significantly," Yellen said in an interview with Reuters. The delta variant did unexpectedly prove this fall to really cause some problems. We saw a severe slowdown in economic growth in the United States on account of it."

Treasury Secretary Janet Yellen speaks during a Senate Banking Committee hearing on Capitol Hill in Washington, Tuesday, Nov. 30, 2021. (AP Photo/Andrew Harnik / AP Newsroom)

"There’s a lot of uncertainty, but it could cause significant problems. We’re still evaluating that," Yellen added.

Public health experts are still working to understand the omicron variant, which was first detected in South Africa. The mutant strain of COVID-19 is thought to be highly contagious, and some experts have warned it could evade immunity provided by existing COVID-19 vaccines.

People wear face masks on the Subway in Manhattan on November 29, 2021 in New York City. (Getty / Getty Images)

The Biden administration’s plan to combat the COVID-19 pandemic this winter includes an extension of mask requirements on public transportation and an expansion of health insurance coverage of at-home COVID-19 tests.

To date, U.S. authorities have confirmed at least two cases of the Omicron variant. Yellen suggested the Omicron variant’s emergence could prolong the country’s effort to defeat the pandemic.


White House Press Secretary Jen Psaki speaks during a daily news briefing at the James S. Brady Press Briefing Room of the White House on December 02, 2021 in Washington, DC. Psaki spoke on a number of topics including President Biden's visit today t (Photo by Anna Moneymaker/Getty Images / Getty Images)

"Over the summer it really looked promising, as though with increased vaccinations and booster shots, life was returning toward normal," she added. "Now, the new variant, the Omicron variant, the pandemic could be with us for quite some time. Hopefully not completely stifling economic activity, but affecting our behavior in ways that contribute to inflation."