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Russian military operation in Ukraine not ‘main driver’, Jerome Powell tells lawmakers

The chairman of the US Federal Reserve dismissed the White House’s claim that the surge in inflation in the country is mainly due to the crisis in Ukraine. During a Senate hearing on Wednesday, Jerome Powell pointed out that inflation was high even before Russia attacked its neighboring state.

He was responding to a question from Senator Bill Hagerty of Tennessee, who said the price situation in the United States had many determining factors, including “Supply chain disruptions, regulations that limit supply… rising inflation expectations and excessive fiscal spending.”

He then asked if Powell agreed with the Biden administration that the situation in Ukraine was the most influential factor, given the dynamics of inflation over the past 18 months.

“No, inflation was high…before the war in Ukraine broke out,” said the Fed chief.

Since Russia attacked Ukraine in late February, the White House has repeatedly accused Russian President Vladimir Putin of causing inflation in the United States. He even coined the term “Putin’s price hike.”

“We know that 61% of [recent inflation] is determined by price – by energy costs, by Putin’s invasion of Ukraine,” Jen Psaki, who was the White House press secretary at the time, told reporters in late April.

Last Sunday, the White House tweeted that the situation in Ukraine was “the main driver of inflation” in the country. Senator Hagerty described this as “disinformation” and said in his exchange with Powell that it was an attempt to deflect blame.

Later that day, Energy Secretary Jennifer Granholm was asked about Powell’s response at a press conference. “Most would say the price of fuel has exacerbated inflation,” she said, arguing that the war in Ukraine had raised prices by decreasing supply.

Russia attacked its neighboring state in late February, following Ukraine’s failure to implement the terms of the Minsk agreements, first signed in 2014, and Moscow’s eventual recognition of the republics of Donetsk and Lugansk Donbass. The protocol brokered by Germany and France was designed to give breakaway regions a special status within the Ukrainian state.

The Kremlin has since demanded that Ukraine officially declare itself a neutral country that will never join the US-led NATO military bloc. kyiv insists the Russian offensive was unprovoked and has denied claims it planned to retake the two republics by force.

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