Treasury Secretary Janet Yellen said Wednesday that while food and energy costs should ease eventually, much of the globe could be hit with inflation and slow growth in the short run.
“Higher food and energy prices are having stagflationary effects, namely depressing output and spending and raising inflation all around the world,” she told reporters at the G7 meeting in Berlin.
Yellen blamed Russian President Vladimir Putin for much of the problem, saying that soaring commodity prices were “due to Putin's choice to launch a war in Ukraine.”
Yellen’s warning comes as gasoline prices hit new highs in the U.S., with some analysts calling for prices near $5 a gallon during the summer months.
“Consumer prices for both gasoline and diesel have soared to record high levels in the U.S. and show no signs of abating,” energy consult Bob McNally told The Washington Post. “While not every recession was triggered by spiking oil prices,” he added, “spiking oil prices always cause or contribute to recession.”