Janet Yellen (US Treasury Secretary) has warned that prices for gas could increase again this year. “It’s a risk that we’re working on the price cap to try to address,” she stressed. “Our price cap proposal is designed to both lower Russian revenues … while also maintaining Russian oil supplies that will help to hold down global oil prices.”
Janet Yellen discusses Inflation, Gas Price Increases and Russian Oil
Treasury Secretary Janet Yellen talked about the U.S. economy, inflation, gas prices, and Russian oil in an interview on CNN’s “State of the Union” Sunday.
Yellen responded to a question about Americans worrying about rising gas prices later in the year.
Well, it’s a risk. And it’s a risk that we’re working on the price cap to try to address.
“Our price cap proposal is designed to both lower Russian revenues that they use to support their economy and fight this illegal war, while also maintaining Russian oil supplies that will help to hold down global oil prices,” Yellen detailed. “So I believe this is something that can be essential, and it’s something that we’re trying to put in place to avoid a future spike in oil prices.”
In June, the European Union issued a package of sanctions that would prohibit seaborne imports from Russia of crude oil. The same applies to petroleum products imports. It will be effective as of February 5, 2023. EU companies cannot provide shipping insurance, brokerage services or finance for oil exports to Russia from Russia.
“This winter, the European Union will cease, for the most part, buying Russian oil,” Yellen explained Sunday. “In addition, they will ban the provision of services that enable Russia to ship oil by tanker.”
The treasury secretary warned that:
This could lead to an increase in the oil price.
Since June’s record-breaking high, the average U.S. gas price has been falling steadily. According to the Treasury department, banning Russian maritime supplies insurance would take five million barrels of crude oil per day off the market. That could trigger an enormous price increase.
Yellen expressed confidence in the Federal Reserve during the interview on Sunday, expressing her belief that they will determine the most effective course of action to prevent an economic recession. She admitted that a recession is “a risk when the Fed is tightening monetary policy to redress inflation,” noting that “it’s certainly a risk that we’re monitoring.”
Yellen claimed that the U.S. economic situation was in dire shape in 2021, when Joe Biden became the President of the United States.
We’re seeing some slowdown in growth, but that’s natural.
Yellen stated again that she remains optimistic about the U.S. economic future. In July she stated that the U.S. was in a transitional state, and not in recession. Despite higher food and energy prices, the treasury secretary opined: “We’ve got a good, strong labor market, and I believe it’s possible to maintain that.”
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