Is the end of the COVID-19 pandemic now in sight?

The governments have started to consider reducing the amount of time people need to isolate themselves with COVID-19. Why, if cases are surging? It is because we are moving from a COVID pandemic to COVID being endemic.

Omicron has swept the UK and once it has the vast majority of people will have been either vaccinated, infected with COVID, or both. However, the peak seems to have now passed. This means that the majority of people have a whole host of antibodies to deal with COVID-19 and future variants are likely to be even less deadly. This is why Bill Gates has recently said that once Omicron has passed Covid will be more like the seasonal flu. People may take a seasonal jab.

China

One tail risk to the latest omicron surge has been China. Will China maintain their Covid-zero policy and shut down whole cities for a relatively small number of cases? The answer seems to be moving to ‘no, they won’t’. According to Bloomberg’s Shuli Ren, “Covid zero” is no longer China’s policy goal. Rather, it’s aiming for “dynamic clearing”, which relies on local governments to stamp out local outbreaks. So, with the winter Olympics just a few weeks away there may be some harsh measures, but once they have cleared then the ‘dynamic clearing narrative’ seems set to stay.

The Fed’s actions

The Fed is now ending QE, hiking rates three times at least this year, and looking at starting QT this year.

The takeaway

The actions are of the governments and central banks unwinding the supportive measures quickly. How can we tell when we are definitely in an endemic phase? Some of the telltale signs are when masks are not as highly required to be worn, self-isolation times are reduced, schools and businesses remain open and the disruptions of 2020 are not implemented.

---

Learn more about HYCM