NEW YORK: Two years since Covid-19 first emerged, global central banks are about to determine if their economies are strong enough to withstand the impact of its most elaborate mutation yet.

       Officials at over a dozen monetary authorities, including the US Federal Reserve (Fed), will once again try to make a policy judgment about a medical phenomenon, being forced to take a view before scientists fully understand the implications of the Omicron variant.

       What’s different compared with the economic fallout from the initial coronavirus outbreak is that central banks have the experience of past shutdowns to gauge, restrictions on activity in most countries are less draconian, consumers and businesses have learned to adapt, billions of vaccines have been given, and this time there’s surging inflation to contend with as well.

       But the challenge of forming monetary policy using a crooked rear-view mirror of pandemic economic data and an obscure image ahead of the dangers of Omicron – all the while enduring the noise of spiking consumer prices – still makes central bankers’ jobs hard to envy right now.

       That combination of extremes makes it likely that only those with relative certainty about the impending threat of inflation on their economies will rush to act on it, rather than waiting until the new year to take a fresh look.

       Of the 20 or so central banks meeting this week, among those seen by economists as most determined to tighten are Russia, Mexico and possibly Norway.

       Within the Group of Seven, the Bank of England is no longer anticipated to begin raising borrowing costs, the Fed may accelerate its wind-down of stimulus, and the European Central Bank will outline its future plans for bond buying.

       The Bank of Japan’s focus will probably be on whether it extends its emergency corporate funding programmes.

       While central bankers weigh the risks, inflation is also preoccupying G-7 finance ministers, who’ll convene virtually to discuss the recent price surge.

       “The emergence of the Omicron variant and the government’s decision to tighten restrictions have significantly lowered the chances that the Bank of England will raise interest rates this month,” said Dan Hanson, a senior UK economist.

       Fed chair Jerome Powell and his colleagues, who meet today and tomorrow, are expected to speed up their removal of policy support and signal interest-rate lift off next year, amid the hottest inflation since 1982.

       Powell told lawmakers last week it would be appropriate to consider reducing the central bank’s bond purchases more rapidly to wrap the process up a few months earlier than mid-2022, as initially planned.

       Quarterly Fed forecasts could show two or even three hikes in 2022.

       Fed officials will have another inflation figure in hand for their deliberations after the Labour Department issues its report on November prices paid to producers.

       The agency reported last week that annual consumer prices advanced by the most in nearly 40 years.

       Retail sales, industrial production and housing starts round out the US data releases in the coming week. — Bloomberg