US Treasury Secretary Janet Yellen warned that gas prices could rise again this year. “It is a risk that we are working on the ceiling to try to address,” she stressed. “Our price cap proposal is designed to both reduce Russian revenue … also keeping Russian oil supplies that will help keep global oil prices down.”
Janet Yellen on rising gas prices, inflation, EU sanctions and Russian oil
Treasury Secretary Janet Yellen spoke on Sunday about the US economy, inflation, gas prices and Russian oil in an interview with CNN’s “State of the Union”.
Asked if Americans should be worried about the new gas price hike by the end of the year, Yellen replied:
Well, it’s a risk. And it is a risk that we are working on the maximum price to try to address.
“Our price cap proposal is designed both to reduce the Russian revenues they use to support their economy and fight this illegal war, and to keep Russian oil supplies that will help keep global oil prices down,” he said. Yellen explained. “So I think this is something that can be essential, and it’s something we are trying to put in place to avoid a future rise in oil prices.”
The European Union imposed a sanctions package in June that will ban maritime imports of Russian crude oil starting December 5 and imports of petroleum products starting February 5, 2023. The sanctions also prohibit EU companies from supplying marine insurance, brokerage services or financing of oil exports from Russia to other countries.
“This winter, the European Union will, for the most part, stop buying Russian oil,” Yellen explained on Sunday. “In addition, they will ban the provision of services that allow Russia to ship oil by tanker.”
The treasury secretary warned:
And it is possible that this could cause oil prices to rise.
The average price of gas in the United States has fallen steadily since it hit an all-time high in June. However, the Treasury Department has estimated that banning Russian maritime supply insurance could take up to five million barrels per day of crude oil and refined products out of the market, which would result in a huge increase in prices.
During Sunday’s interview, Yellen also expressed her confidence in the Federal Reserve to determine the best course of action to avoid an economic downturn. She admitted that a recession is “a risk when the Fed is tightening monetary policy to correct inflation”, noting that “it is certainly a risk that we are monitoring”.
Claiming that the US economy was already in poor shape in 2021 when Joe Biden took office as US president, Yellen said:
We are seeing a slowdown in growth, but it is natural.
Yellen reiterated that she is optimistic about the US economy. In July, you said that the US economy is in a state of transition, not recession. Despite the higher prices of food and energy, the secretary of the treasury said: “We have a good and strong labor market and I believe it is possible to maintain it.”
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