The U.S. Treasury Secretary, Janet Yellen, said yesterday that Americans should prepare themselves for another year of high inflation, reports CNBC.
The remarks come on the heels of yet another historic CPI report, with consumer prices rising 7.9% in February, the fastest rise since 1982. Treasury Secretary Yellen had told CNBC several months ago that she anticipated moderating inflation this year but has since said that Russia’s invasion of Ukraine has heavily impacted the global commodities markets.
“We have seen a very meaningful increase in gas prices, and my guess is that next month we’ll see further evidence of an impact on U.S. inflation of Putin’s war on Ukraine,” Yellen said.
Impacted commodities include oil, which has hit multi-year highs this week with the continued Russian assault of Ukraine, as well as wheat, palladium, and various other commodities that will have far-reaching price impacts.
“I think there’s a lot of uncertainty that is related to what’s going on with Russia in Ukraine. And I do think that it’s exacerbating inflation,” Yellen said. “We’re likely to see another year in which 12-month inflation numbers remain very uncomfortably high.”
With the Fed set to meet next week to determine interest rate increases in the face of continued rising inflation and the uncertainty introduced by the war in Ukraine, it will be a balancing act of working to curtail inflation while not driving the economy into a recession.
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