U.S. Treasury Secretary Janet Yellen has warned that gasoline prices could rise again this year. “It’s a risk we’re working on price caps to try to address“, she stressed. “Our price cap proposal is designed to both reduce Russian revenues…while maintaining Russian oil supplies that will help maintain global oil prices.“
Janet Yellen on rising gas prices, inflation, EU sanctions and Russian oil.
Treasury Secretary Janet Yellen discussed the U.S. economy, inflation, gas prices and Russian oil during an interview on “State of the Union” by CNN on Sunday.
When asked if Americans should be concerned about gas prices rising again later this year, Yellen said:
Well, that’s a risk. And it’s a risk that we’re working on the price cap to try to address that.
“Our price cap proposal is designed to both decrease the Russian revenues they use to support their economy and fight this illegal war, while maintaining Russian oil supplies that will help maintain world oil prices“, Yellen detailed. “So I think that’s something that can be critical, and it’s something that we’re trying to put in place to prevent a future spike in oil prices.“
The European Union imposed a package of sanctions in June that will ban imports by sea of Russian crude oil beginning Dec. 5 and imports of petroleum products beginning Feb. 5, 2023. The sanctions also prohibit EU companies from providing marine insurance, brokerage services or financing for Russian oil exports to other countries.
“This winter, the European Union will essentially stop buying Russian oil“, explained Mrs. Yellen on Sunday. “In addition, they will prohibit 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 spike.
The average price of gas in the United States has been falling steadily since it hit a record high in June. However, the Treasury Department has estimated that the ban on Russian seaborne supplies could remove up to five million barrels a day of crude and refined products from the market, triggering a massive price spike.
During the Sunday interview, Janet Yellen also expressed confidence in the Federal Reserve to determine the best course of action to avoid an economic recession. She admitted that a recession is “a risk when the Fed tightens monetary policy to bring inflation back up“, noting that “this is certainly a risk we are watching for.“
Asserting that the U.S. economy was already in bad shape in 2021, when Joe Biden took office as President of the United States, Yellen said:
We are seeing some slowing of growth, but that is natural.
Janet Yellen has reiterated that she is optimistic about the U.S. economy. In July, she said the U.S. economy was in a state of transition, not recession. Despite rising food and energy prices, the Treasury Secretary said, “We have a good, strong labor market, and I think it’s sustainable.“