With authorities having shown no appetite to reimpose restrictions on activity and new virus cases now levelling off . . . [and] assuming new virus cases drop back over the coming weeks, this all suggests that the hit to demand from the Delta variant will be more modest than in previous waves. . . . [P]otentially more important is the disruption being caused by the Delta variant in other parts of the global economy, particularly in key manufacturing hubs in Asia. The worsening semiconductor shortage has already prompted Ford and GM to extend plant closures which will exacerbate the weakness in autos production and sales. At the same time, evidence suggests that renewed virus fears may be preventing some US workers from returning to the labour force, contributing to the “persistent and extensive” labor shortages noted in the Fed’s latest Beige Book. This suggests the hit to supply from the Delta variant could end up being as significant as its effects on demand, keeping upward pressure on prices and holding back the recovery in real activity.