{"id":409760,"date":"2022-02-25T21:13:48","date_gmt":"2022-02-25T18:13:48","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/how-ukraine-war-could-make-it-worse\/"},"modified":"2022-02-25T21:13:48","modified_gmt":"2022-02-25T18:13:48","slug":"how-ukraine-war-could-make-it-worse","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/how-ukraine-war-could-make-it-worse\/","title":{"rendered":"#How Ukraine war could make it worse"},"content":{"rendered":"<p>&#8220;<strong>#How Ukraine war could make it worse<\/strong>&#8221;<\/p>\n<div>\n<aside class=\"single__inline-module alignleft\">\n<\/aside>\n<p>A key indicator of inflation showed another increase in prices for January as Americans gird for more economic turbulence exacerbated by Russia\u2019s invasion of Ukraine.<\/p>\n<p>The personal consumption expenditures index \u2014 or PCE \u2014 which is put out by the Department of Commerce and is considered the preferred measure of inflation by the Federal Reserve, rose to 5.2% in January when compared to the previous year.<\/p>\n<p>In the 12 months through January, the\u00a0PCE\u00a0price index has jumped 6.1%. That was the largest rise since February 1982 and followed a 5.8% year-on-year increase in December.<\/p>\n<p>The data from the Commerce Department coupled with the unfolding crisis in Eastern Europe is likely to spur the Fed to hike interest rates at a greater pace than anticipated.<\/p>\n<p>That\u2019s because Russia is a big global producer of oil and any disruption to its output through either sanctions or strife could send oil prices sharply higher. Already oil prices have moved higher in anticipation of trouble coming down the line. <\/p>\n<p>Higher oil prices can filter to the US consumer through more expensive gasoline and other energy costs \u2014 like heating oil. Rises in those prices would only push inflation higher \u2014 and push the Federal Reserve to increase interest rates to smother price increases.<\/p>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"682\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/02\/inflation-09.jpg?quality=90&amp;strip=all&amp;w=1024\" alt=\"Despite higher levels of inflation, American consumer spending also rose in January, according to the latest data.\" class=\"wp-image-21333859\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/02\/inflation-09.jpg?quality=90&amp;strip=all&amp;w=1535 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/02\/inflation-09.jpg?quality=90&amp;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/02\/inflation-09.jpg?quality=90&amp;strip=all&amp;w=512 512w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><figcaption>Despite higher levels of inflation, American consumer spending also rose in January, according to the latest data.<\/figcaption><figcaption><span class=\"credit\">Getty Images<\/span><\/figcaption><\/figure>\n<p>\u201cDespite the war in Ukraine, the Fed is going to be forced to raise interest rates next month and they will have pressure to raise rates \u2026 at the same pace or quicker than would have been the case had Russia not invaded Ukraine,\u201d Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, told The Post.<\/p>\n<p>The Russian invasion of Ukraine has stoked fears that the oil market could see further shocks. Crude surged past $105 a barrel on Thursday.<\/p>\n<p>Meanwhile, in the next two weeks, the average price of a gallon of gasoline in the US could reach $3.75. If the geopolitical tumult continues, it could hit $5 a gallon within months, experts warn.<\/p>\n<p>These factors will only steel the Fed\u2019s resolve to raise interest rates, observers say.<\/p>\n<p>\u201cPrior to the return of inflation, the Fed would have less urgency to raise rates in the face of war or other threats to economic growth, but in this situation, with inflation likely to be exacerbated by disruptions due to war, the Fed needs to do the opposite of what they would normally do and that\u2019s to fight an even bigger threat of inflation,\u201d Zaccarelli said, noting the effect on oil markets.<\/p>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"682\" src=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/02\/inflation-19.jpg?quality=90&amp;strip=all&amp;w=1024\" alt=\"The Fed is expected to raise interest rates several times this year in a bid to cool down runaway inflation.\" class=\"wp-image-21333872\" srcset=\"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/02\/inflation-19.jpg?quality=90&amp;strip=all&amp;w=1535 1536w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/02\/inflation-19.jpg?quality=90&amp;strip=all 1024w, https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/02\/inflation-19.jpg?quality=90&amp;strip=all&amp;w=512 512w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"\/><figcaption>The Fed is expected to raise interest rates several times this year in a bid to cool down runaway inflation.<\/figcaption><figcaption><span class=\"credit\">dpa\/picture alliance via Getty I<\/span><\/figcaption><\/figure>\n<p>The PCE reported on Friday differs from the consumer price index, or CPI, that is released by the Labor Department. The CPI reading is even higher: It rose to 7.5% in January \u2014 which is also the fastest rate since 1982. Unlike CPI, the core PCE\u00a0does not include volatile food and energy prices.<\/p>\n<p>Meanwhile, American household spending jumped by 2.1% in January, surpassing the 0.8% in December. When adjusted for inflation, consumer spending jumped 1.5% in January after declining 1.3% in December.<\/p>\n<p>\u201cNever underestimate the American consumer,\u201d said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto.\n                        <\/p><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. 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The personal consumption expenditures index \u2014 or PCE \u2014 which is put out by the Department of Commerce and is considered the preferred&#8230;<\/p>\n","protected":false},"author":1,"featured_media":409761,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2022\/02\/inflation-10.jpg?quality=90&strip=all&w=1024","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[126154,5069,70550,70551,70552,72970,74489,4975,70868,126128],"class_list":["post-409760","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-2-25-22","tag-economy","tag-federal-reserve","tag-inflation","tag-interest-rates","tag-oil","tag-oil-prices","tag-russia","tag-ukraine","tag-ukraine-war"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/409760","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=409760"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/409760\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/409761"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=409760"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=409760"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=409760"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}