Russia’s war on Ukraine has ‘highly uncertain’ implications for US economy: Fed chair

ANKARA

Russia’s war on Ukraine has “highly uncertain” implications for US economy, the Federal Reserve chair said on Wednesday.

"The conflict is causing tremendous hardship for the Ukrainian people," Jerome Powell said in his testimony before the House of Representatives Committee on Financial Services.

"The near-term effects on the US economy of the invasion of Ukraine, the ongoing war, the sanctions, and of events to come, remain highly uncertain," he added.

Investors have been wondering whether the war between Ukraine and Russia, coupled with US-spearheaded western sanctions on Moscow, would force the Fed to pass on its high-anticipated rate hike at the conclusion of its two-day meeting on March 16.

Powell hinted that the central bank will go ahead in starting to make interest rate increases to tame record high inflation.

"Making appropriate monetary policy in this environment requires a recognition that the economy evolves in unexpected ways. We will need to be nimble in responding to incoming data and the evolving outlook," he explained.

The Fed chair noted that the Federal Open Market Committee's assessments will take into account a wide range of information, from labor market conditions, inflation pressures and inflation expectations, to financial and international developments.

"We continue to expect inflation to decline over the course of the year as supply constraints ease and demand moderates because of the waning effects of fiscal support and the removal of monetary policy accommodation," he said.