The United States is engaged in extremely active discussions with European countries aimed at limiting the revenue that Russia can generate from the sale of oil, US Treasury Secretary Janet Yellen said on Tuesday, Reuters reported.
Yellen told the Senate Finance Committee that US officials are trying to keep Russian oil flowing on the world market in order to keep prices down and avoid a jump that could cause a global recession.
“But the absolute goal is to limit the revenue going to Russia,” she said, adding that there are various ways to achieve this, including a possible move by buyers to unite and limit the prices they pay Moscow.
Yellen acknowledged on Tuesday that inflation was at “unacceptable levels”, but also tried to stress that this was not a problem unique to the United States, CNN Business reported.
“Putin’s war in Ukraine is affecting world energy and food prices,” Yellen told lawmakers. “We are not the only country with inflation. You can see this in almost every developed country in the world.”
Speaking during a Senate finance committee hearing, Yellen noted the Biden administration’s record release of oil from the strategic oil reserve. “Energy and petrol prices, although very high, would be higher without it,” Yellen said.
However, the Secretary of the Treasury stressed that the United States is not immune to global energy shocks. “We are part of the world’s oil markets, which are subject to geopolitical influence. Given the global nature of these markets, it is virtually impossible for us to isolate ourselves from shocks like those happening in Russia that drive world oil prices.” said Yellen.
She added that it was crucial to make the United States “more dependent on wind and sun, which are not subject to geopolitical influence.”
In a prepared speech, Yellen acknowledged that the United States faces “macroeconomic challenges, including unacceptable levels of inflation.” Yellen called on lawmakers to take action to tackle high inflation.
“I believe that Congress can do a lot to alleviate the costs that households are experiencing,” Yellen said. In particular, she pointed out investments in reducing the cost of prescription medicines, investing in clean energy, investing in affordable housing and helping families with childcare and medical expenses.
It will take time to curb inflation, Yellen said. “There is no doubt that we have huge inflationary pressures. Inflation is our main economic problem at the moment,” Yellen told lawmakers. “It is crucial that we deal with it. I really expect inflation to remain high, although I very much hope that it will go down.”
Yellen explained that her previous expectation that inflation would be “transient” did not take into account the many variants of Covid-19 that disrupted supply chains, nor Russia’s invasion of Ukraine.
“As President Powell pointed out, we could both probably use a better term than ‘transitional,'” Yellen said, referring to a previous call by Federal Reserve Chairman Jerome Powell to withdraw the term.
“I guess I see most of the inflation as a reflection of supply and demand factors. On the supply side, we had huge supply chain problems due to the pandemic and changes in the consumption pattern of services to goods.” The finance minister also cited “huge increases” in food and energy prices, partly reflecting Russia’s invasion of Ukraine.
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