US inflation to remain 'uncomfortably high' for another year: Treasury head

By Ovunc Kutlu

ANKARA (AA) - US Treasury Secretary Janet Yellen has said she expects inflation in the country to remain "very uncomfortably high" for another year.

"I don’t want to make a prediction exactly as to what’s going to happen in the second half of the year ... We’re likely to see another year in which 12-month inflation numbers remain very uncomfortably high," she told US network CNBC on Thursday.

The annual consumer inflation in the US rose 7.9% in February, marking the largest 12-month increase since January 1982, according to the Labor Department figures released Thursday.

President Joe Biden later blamed his Russian counterpart Vladimir Putin for the record inflation in over 40 years.

Yellen said: "There’s a lot of uncertainty that is related to what’s going on with Russia in Ukraine. I do think that it’s exacerbating inflation."

"We have seen a very meaningful increase in gas prices, and my guess is that next month we’ll see further evidence of an impact on US inflation of Putin’s war on Ukraine," she explained.

Crude oil prices earlier this week reached their highest level since 2008, while American consumers felt the pressure at the gas pump.

US gasoline prices continued to rise Thursday with the national average standing at $4.318 per gallon for regular gasoline.

The price of regular gasoline saw an increase of 15.8% from a week ago, when it stood at $3.728 a gallon.

It marked a whopping 24.2% monthly increase from $3.477 last month and a 53.4% rise from $2.815 a year ago, according to the data compiled by Anadolu Agency.

"Russia, in addition to exporting oil, … Ukraine, and Russia are major producers of wheat. We’re seeing impacts on food prices, and I think that can have a very severe effect on some very vulnerable emerging market countries," Yellen said.

About Washington's sanctions on Moscow, she said they have been "devastating in their economic impact" on Russia, noting: "We have all but cut Russia off from the international financial system."

“The export controls that we have put in place will have a devastating longer, medium-run effect in depriving Russia of the technology that they need to run a modern economy and advance in defense and other areas.

"Russia is experiencing very severe economic consequences. I expect there to be a severe downturn in the Russian economy," Yellen explained.

Russia’s war on Ukraine, which began on Feb. 24, has drawn international condemnation, led to financial sanctions on Moscow, and spurred an exodus of global firms from Russia. The West has also imposed biting export restrictions on key technologies that are now prohibited from being sent to Russia.

At least 549 civilians have been killed and 957 others injured in Ukraine since the beginning of the war, the UN has said, while also cautioning that conditions on the ground make it difficult to verify the true number.

Over 2.5 million people have fled to neighboring countries, with about 2 million more estimated to be displaced inside Ukraine, according to the UN refugee agency.