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Federal Reserve Chairman Jerome Powell says 'inflation was high before' Putin's Ukraine invasion

The chairman of the Federal Reserve told a Senate hearing on Thursday that “inflation was high before” Russian President Vladimir Putin’s invasion of Ukraine, where President Joe Biden has doggedly attempt to deflect the blame for high prices

Fed Chief Jerome Powell
Fed Chief Jerome Powell | Wikimedia Commons

June 23, 2022 7:42am

Updated: June 23, 2022 10:20am

The chairman of the Federal Reserve told the Senate Banking Committee on Wednesday that “inflation was high before” Russian President Vladimir Putin’s invasion of Ukraine, where President Joe Biden has doggedly attempt to deflect the blame for high prices. 

Chairman Jerome Powell was responding to a line of reason from Sen. Bill Hagerty (R-TN) of the Senate Banking Committee on Wednesday, reports the New York Post.

“I realize there are a number of factors that play a role in those historic inflation that we’re experiencing — supply chain disruptions, regulations that constrain supply, we’ve got rising inflation expectations and excessive fiscal spending, but the problem hasn’t sprung out of nowhere,” Hagerty began.

“In January of 2021, inflation was at 1.4%. By December of 2021, it had risen to 7% — a fivefold increase. Now, since the war in Ukraine began in late February, the rate of inflation has risen incrementally another 1.6% to a current level of 8.6%. So again, from 7% to 8.6%.”

Hagerty then asked Powell, “Given how inflation has escalated over the past 18 months, would you say that the war in Ukraine is the primary driver of inflation in America?”

Powell responded, “No, inflation was high before — certainly before the war in Ukraine broke out.”

Hagerty said he was glad to hear that response.

“The Biden administration seems to be intent on deflecting blame and as recently as just this past Sunday spread the misinformation that Putin’s invasion of Ukraine is the ‘biggest single driver of inflation.’ I’m glad you agree with me that that is not the truth,” the Senator said.

Biden has sought to brand the highest inflation in forty years as “Putin’s Price Hike,” using the term the same day that Powell made the statement.

“Today, he is calling on Congress and states to take additional legislative action to provide direct relief to American consumers who have been hit with Putin’s Price Hike,” reads a press release on Wednesday regarding a federal gas tax freeze.

Powell later responded to a question from Sen. Kyrsten Sinema (D-AZ) at the hearing that fuel and food prices were clearly influenced by the war in Ukraine, on top of the jump in prices from before the war.

“The increase in commodity prices are clearly connected to to the war in Ukraine. And so that that part of inflation would be certainly much lower than it is without the war in Ukraine,” Powell said.

Powell was confirmed to a second term as chairman of the Fed last month, which raised the federal funds rate by 0.75% at its June meeting to head off inflation.