Treasury Secretary, Janet L Yellensaid on Wednesday that Americans shouldn’t expect immediate relief from high gas pricesbut said the increase in global supply is likely to provide long-term relief for motorists at the pump.
Yellen he also warned of the possibility of slowing growth combining with inflation around the world: “Rising food and energy prices are having stagflationary effects, that is, depressing production and spending and increasing inflation around the world”, he told reporters. “We’re doing what we can to prevent further increases in energy prices… but we also want to make sure” about what Europe stems from dependence on Russian oil and gas, he said Yellen. And he added: “These pressures are not likely to abate in the very near future.”.
Yellen he stressed that he did not expect the US economy to enter a recession, arguing that it is well positioned for economic risks, pointing to the rapid growth that came after the corona recession. But he said that Europe is probably more “vulnerable”, citing its greater dependence on Russian energy than that of USA.
“It is an environment full of risks, both in terms of inflation and possible slowdowns“, said Yellen.
The comments of Yellen occurred when the cost of gasoline for the first time exceeded $4 per gallon in all US states. Nationally, the average price of a gallon of gasoline was $4.52with much higher costs in some states, such as California. Rising energy prices come on top of a U.S. economy that has already suffered the highest inflation in nearly four decades, and this summer could drive gasoline prices even higher on increased demand as consumers go out on the town. highway.
Yellen and the ministers of Group of Seven Economy Western industrialized countries meet this week in Germany to discuss global economic challenges, as well as possible measures to deepen sanctions against Russia for his invasion of Ukraine. Officials face an extraordinary set of challenges, trying to balance the pressure to punish Russia with renewed fears of a global slowdown and high inflation around the world.
Yellen said the sanctions are designed to impose maximum pain on Russia while mitigating their impact on the rest of the world economy.. He said US officials have always understood that it would be impossible to completely insulate other nations from the impact of war.
“This is always the core of the conversations we have had“, said Yellen.
Energy prices represent one of its most pressing problems, as gas costs have risen since Russia invaded Ukraine in February, which has disturbed international markets. The Europeans have discussed additional measures to deprive Russia of its income from the sale of oil and gas –USA has already banned energy imports from Russia – but any such move could drive prices up even more. Yellen told reporters Tuesday that US and European officials will discuss measures this week such as a European price cap on Russian energy purchases, but no decision has been made.
Bob McNallyPresident of Rapidan Energy Groupan energy consulting company, said consumer prices could approach $5 a gallon this summer and that prices will continue to rise as long as consumption continues to rise, and “so far there are few signs of a significant contraction in demand”.
“Consumer prices for both gasoline and diesel have soared to record highs in the US and show no signs of letting up“, said McNally. “Although not all recessions have been triggered by rising oil prices, rising oil prices always cause or contribute to the recession.”.
Yellen He also said that it is likely USA end a waiver of sanctions that allows Russia make interest payments on its debts, which could increase the chances of a Russian default that would have repercussions on international markets.
He also noted his push for international aid to alleviate the new hunger problems caused by the war. Yellen ordered the international financial institutions to come up with a plan to deal with severe food shortages.
“This has been important progress, but we need to redouble our efforts to make sure that people around the world can feed their families.Yellen said.
(C) The Washington Post.-
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