Yellen says inflation and rising gas prices remain a ‘risk’



CNN

Treasury Secretary Janet Yellen said on Sunday there is a ‘risk’ that US gas prices could rise again later this year as fears grow that Americans’ wallets could be put to the test. hardship by a price spike similar to the one seen this summer.

“Well, it’s a risk. And that’s a risk that we’re working on the price cap to try to deal with it,” Yellen told CNN’s Dana Bash on “State of the Union” when asked if Americans should be worried about rising gasoline prices later this year.

“This winter, the European Union will essentially stop buying Russian oil. And, in addition, they will ban the provision of services that allow Russia to ship oil by tanker. And it is possible that this will cause a spike in oil prices,” she added.

Yellen continued: “Our price cap proposal is designed to both reduce the Russian revenue they use to support their economy and fight this illegal war, while maintaining the supply of Russian oil which will help maintain prices. world oil prices low. So I believe that’s something that can be critical, and it’s something that we’re trying to put in place to avoid a future spike in oil prices.

The secretary’s comments could help fuel fears that petrol prices could rise again after they started flowing last month, relieving consumers weary of inflation and an economy mired in a downturn. The steady decline in prices was driven by multiple factors, including recession fears that sent oil prices plummeting and some Americans cutting back on their driving when gas prices rose above $5 a gallon.

Earlier this month, finance ministers of the group of G7 countries – the United States, Japan, Canada, Germany, France, Italy and the United Kingdom – said they would ban the provision of “services enabling the maritime transport of crude oil and petroleum products of Russian origin in the world” above the price ceiling. This could block insurance coverage or funding for oil shipments.

The maximum price would be set by “a broad coalition” of countries, they said in a joint statement. It would come into force alongside the next batch of European Union sanctions, which include a ban on maritime imports of Russian oil from early December.

On Sunday, Yellen also stressed his confidence in the Federal Reserve to determine the best way to avoid an economic recession, but acknowledged that a potential recession is “a risk when the Fed tightens monetary policy to restore inflation, c So it’s definitely a risk that we’re being watched.”

“We’re seeing some slowing in growth, but that’s natural,” she told Bash, noting the poor shape of the economy that President Joe Biden inherited in 2021.

She added that despite rising food and energy prices, “we have a good, strong labor market, and I think it’s possible to sustain that.”

Yellen stressed that she was optimistic about the economy and stressed that the United States is not in a recession. In response to high inflation, the Federal Reserve has raised interest rates four times so far in 2022 and is expected to raise rates further this year.

Leave a Comment