The coronavirus delta variant has already led some officials to reinstate mask mandates, but Minneapolis Federal Reserve President Neel Kashkari warns that it could also hinder the economy’s comeback. In an interview with CBS’ “Face the Nation,” Kashkari observed that the more transmissible delta variant is breeding “caution” among Americans, which has contributed to hesitancy when it comes to going back to work. “I was very optimistic the fall would be a very strong labor market with many of those Americans coming back to work,” he said. That’s still my base-case scenario, but if people are nervous about the delta variant, that could slow some of that labor market recovery and therefore be a drag on our economic recovery. So the sooner we can get people vaccinated – the sooner we can get delta under control – the better off our economy’s going to be.” Kashkari noted that in addition to caution about contracting the illness, there are more indirect factors behind people not returning to work. These, he said, include having issues with child care as well as enhanced unemployment benefits. Those benefits, Republicans have warned, have led to a lack of motivation to return to work because in some cases the benefits pay more than the jobs people had. Republicans have urged the administration to end the enhanced benefits, which provide an extra $300 per week. It is set to expire Sept. 6. In May, Biden warned that people who turn down job offers could lose their benefits. So far, 26 states have opted out of the enhanced benefits and require people collecting unemployment to look for work. National Economic Council Director Brian Deese was more optimistic, telling “Fox News Sunday” that “jobs are plentiful and wages are going up” while almost 70% of American adults have received at least one vaccine dose. “We have to stay vigilant, we have to stay focused, but we, our economy, and this recovery are strong, and there’s durable momentum in the economy, we just have to keep that going,” Deese said. Kashkari also addressed recent inflation, admitting that “it was greater than I thought” but maintaining that he still believes it is temporary because it is not a broad inflation across the entire economy. Still, he said, “We’re paying very close attention.” He did say supply chain problems that have impacted a number of industries have been an inflation concern, but he was optimistic that these problems will “get worked out.” He cited a reduction in lumber prices after they had spiked and a temporary toilet paper shortage earlier in the pandemic. Kashkari said many of the supply chain issues were just “the market at work as businesses are trying to work out their issues and become more efficient,” he said. Nick Note: I want to be clear here. It is my firm belief wage and material inflation is not embedded. And the consumer has massive inflation fears and expectations for the future. And shortages are now past the reflation stage. One would expect supply lines to fill up by now….. And that is not happening.. The problem is the Delta variant is doing 2 things. It is sending infected people home. And it is scaring the shit out of our of smart people (High level workers in chips and advanced materials) who have decided to hunker down at home and collect their benefits. Billy bob anti vaccers are mostly low level low skill low paid people… Hillbillies in Arkansas driving trucks. And Flow the waitress and hospitality workers in southern Missouri tourist industry. We have has been coal miners in Virginia not taking warehouse jobs and the like. And coon asses in Louisianan not shimpering and collecting crawdads.. I expect this to be a peek in economic activity and and i expect the economy to shut right back down again…… Chins is closing shop.