Although a world away, American citizens are feeling the punishing effects of the global economic sanctions against Russia. Inflation has continued to soar in the last month, according to federal data released in February. In the past few months, prices for fuel, food, rent, and other goods surged due to pandemic labor shortages and supply-chain bottlenecks.
Even prior to the Russian invasion of Ukraine on Feb. 24, the data over the last two months heightened concerns about rising inflation. Analysts are warning that Russia’s invasion of Ukraine will likely drive costs even higher.
Nikolai Roussanov, professor of finance at Wharton School, talks to Penn Today about the economic impact of the war, inflation, and energy.
Q. How will the Ukraine crisis affect inflation in the U.S. in the coming months?
A. We are coming into this new crisis with historically high inflation rates, not seen since the early 1980s. In February, the CPI [Consumer Price Index] inflation rate was 7.9% at annual rate (or relative to 12 months prior), but also revealing are its components. Economists often differentiate between food and energy prices, which are very volatile, and the rest of the CPI basket (also known as core inflation), which is smoother but also more persistent.
We saw the same rate for food as the headline number (7.9%), a 25% increase in the price of energy goods, which had come down, as it was running higher, as high as 50%, in earlier months, and a record high rate of core...
Read Full Story: https://finchannel.com/how-sanctions-on-russia-and-the-invasion-of-ukraine-affect-the-u-s-economy/
Your content is great. However, if any of the content contained herein violates any rights of yours, including those of copyright, please contact us immediately by e-mail at media[@]kissrpr.com.
