Federal Reserve Chairman Jerome Powell on Wednesday admitted that inflation levels were already high before Russia’s invasion of Ukraine, contradicting the Biden administration’s insistence that skyrocketing price increases are largely due to Moscow’s “special military operation” in the eastern European country.
Powell made the admission during a Senate Banking Committee hearing after Sen. Bill Hagerty (R-Tenn.) questioned the Fed chairman over whether or not he believed Ukraine is the “primary driver of inflation in America.”
“I realize there are a number of factors that play a role in the 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 said.
The lawmaker went on to note that inflation was 1.4 percent in January of last year and that by December of the same year, it had risen to 7 percent, marking a fivefold increase.
Since Russian troops invaded Ukraine on Feb. 24, inflation rates have continued to soar across the United States, rising incrementally to reach a high of 8.6 percent in May, forcing many Americans to tighten their belts and sparking fears of an economic recession.
Responding to Hagerty’s assertions, Powell admitted that inflation levels were already high prior to Russia’s invasion of its neighbor.
“No, inflation was high … certainly before the war in Ukraine broke out,” Powell told lawmakers.
“I’m glad to hear you say that,” Hagerty responded while noting that the Biden administration “seems to be intent on deflecting blame” and had “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,” Hagerty told Powell.
The White House has for months maintained that soaring inflation levels are due to Russian President Vladimir Putin’s invasion of Ukraine, or what Biden officials refer to as “Putin’s price hike.”