Dr. Cecilia Rouse, chair of the Council of Economic Advisers, said Monday that gas and energy prices are expected to rise further due to U.S. sanctions imposed on Russia.
“This is an important moment for democracy, but what we do know is that Putin’s invasion of Ukraine will have impacts on both energy prices and food prices,” Rouse said. “So, as the president has said, we can expect that while our sanctions are going to have their focus and most of their impact on the Russian economy, that we can expect we will see a bit of impact in the United States as well.”
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Rouse warned of an increase in gas and oil prices and a potential impact on food due to a rise in fertilizer prices. (RELATED: US Gas Prices Skyrocket At Record Rate Due To Russian Sanctions)
“The president is focused on doing what he can to make ensure that those increases are contained and doing what he can to ease them for the American people,” she continued. “He’s worked with our partners to increase an additional 60 million barrels from the Strategic Petroleum Reserve, and he has other options on the table that he will be considering as they come up.”
Rouse then noted that food shortages are not expected to occur in the U.S. due to it being a net exporter, but the administration is working closely with partners to “minimize the impacts” on nations that heavily rely on Ukraine and Russia for “wheat, in particular, and other grains.”
The president warned Thursday of food shortages, adding that he and the G7 “talked about urging all European countries and everyone else to end trade restrictions on sending, limitations on sending food abroad.” Ukraine and Russia accounted for a combined 25.4% of the world’s wheat production in 2019, but Ukrainian farmers are now short on fertilizer, fuel and other goods.
Inflation recently soared to its highest levels in four decades, with the Consumer Price Index (CPI) rising 0.8% in February, bringing the key inflation indicator’s year-over-year increase to 7.9%. Gas prices exceeded an average of $4.1 per gallon nationwide — the highest costs in U.S. history — in early March, shortly after Russia’s full-scale invasion of Ukraine.
The president had proposed manufacturing things like cars and semiconductors in America rather than relying on foreign imports to combat inflationary costs. Some economists, however, have argued that the president’s proposal of “Buy American” policies will only exacerbate inflation rather than ease rising costs.