US Inflation Predicted to Reach Double Digits Amid Invasion of Ukraine

MAR 14 2022·Updated JAN 23 2023

Story

Image credit: Reuter [via Business Insider]

The Facts

Economist Mohamed El-Erian predicts that US inflation will hit double digits this summer due to the ripple effects of the invasion of Ukraine.
New York Post
This prediction follows February's US Consumer Price Index showing inflation at a 40-year high of 7.9%.
Business Insider
The US economy has seen a rise in prices since the onset of COVID. This has been exacerbated by the rising fuel costs due to the war in Ukraine.
Reuters
The Fed's main tactic to counteract inflation is to hike up interest rates. This increases the cost of borrowing, discourages demand, and, in theory, helps to stabilize prices.
Business Insider
Fed officials will meet this week to create an action plan to combat the current and anticipated inflationary pressures.
New York Post

Sources Split

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The Spin

Pro-establishment narrative

The war in Ukraine has brought a lot of economic uncertainty and the Fed is having to carefully walk that tightrope: raising rates too quickly is dangerous and can lead to a recession, but leaning too far on the other side of the spectrum can be just as disastrous. The Fed is right to proceed with caution.

Bloomberg.com

Establishment-critical narrative

The inflation surge began long before the invasion of Ukraine, but the Fed was quick to dismiss it as temporary. We are now seeing the result of their nonchalant approach and it's no surprise that Putin is being used as a scapegoat.

NBC