Fed chief at odds with Biden over cause of US inflation — Analysis

Russia’s military operation in Ukraine is not the ‘primary driver,’ Jerome Powell told lawmakers

The chairman of the US Federal Reserve has rejected the White House’s assertion that soaring inflation in the country is mostly being driven by the crisis in Ukraine. Jerome Powell, the chairman of the US Federal Reserve pointed out Wednesday that inflation had been high before Russia invaded its neighboring country.

Responding to Senator Bill Hagerty from Tennessee’s question, he said that the US price situation was influenced by many factors. “supply-chain disruptions, regulations that constrain supply… rising inflation expectations, and excessive fiscal spending.”

Powell was then asked by Biden if Powell believed that Ukraine was the biggest factor in the current inflation.

“No, inflation was high… before the war in Ukraine broke out,”The Fed chief stated.

After Russia’s attack on Ukraine in February, the White House blamed Russian President Vladimir Putin of inflating the US. This term has even been coined by the White House “Putin’s price hike.”

“We know that 61% of [recent inflation] is driven by the price – by energy costs, by Putin’s invasion into Ukraine,”Jen Psaki was at that time the White House Press Secretary. She told reporters late April.

The White House posted on Sunday that Ukraine’s situation was “very serious”. “the biggest single driver of inflation”The country. Senator Hagerty described it as “misinformation”Powell, who he said that it was an attempt by Powell to shift blame.

Later in the day, Secretary of Energy Jennifer Granholm was asked about Powell’s response during a press conference. “Most would say that the price of fuel has exacerbated inflation,”According to her, the war in Ukraine caused an increase in prices and a reduction of supply.

Russia attacked its neighboring state in late February, following Ukraine’s failure to implement the terms of the Minsk agreements, first signed in 2014, and Moscow’s eventual recognition of the Donbass republics of Donetsk and Lugansk. This protocol, which was French and German-brokered, was intended to grant the regions that broke away special status in the Ukrainian government.

Since then, the Kremlin demanded Ukraine declare itself neutral and vow to never join NATO’s military bloc. Kiev maintains that Russia’s offensive was not provoked and denies claims that it planned to seize the two republics.

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