Treasury Secretary Janet L. Yellen plans to warn on Wednesday of major consequences for the global economy of Russia’s invasion of Ukraine, the conflict and global sanctions imposed in response to aggression Russian disrupting the flow of food and energy in the world. .
Yellen’s comments, who will appear before a House committee on Wednesday, come as the United States and the European Union are set to announce a new round of sanctions against Russian financial institutions, government officials and state enterprises as the war in Ukraine shows no signs of abating.
“Russia’s actions represent an unacceptable affront to the rules-based global order and will have enormous economic repercussions in Ukraine and beyond,” Yellen told a Financial Services Committee hearing, according to his prepared remarks.
Ms. Yellen will clarify that the United States does not intend to ease the economic pressure it exerts on Russia through sanctions against its central bank, financial institutions and leaders. Ms Yellen plans to highlight that more than half of the global economy is united in the effort to impose sanctions on Russia and that the Biden administration is working to ensure that Russia does not benefit from funding available through the World Bank and the International Monetary Fund.
“The Treasury is committed to holding Russia accountable for its actions so that it cannot benefit from the international financial system,” Yellen plans to tell lawmakers.
Ms Yellen also plans to highlight how the war in Ukraine is causing global food prices to spike amid disruptions in wheat exports, making the effect particularly problematic for poor countries. She will also argue that Russia’s actions are a reminder to invest in energy independence so that the world is not dependent on these nations for oil and gas.
“We are witnessing the vulnerability that comes from relying on a single fuel source or a single trading partner, which is why it is imperative to diversify energy sources and suppliers,” Ms. Yellen will say. .
The economic disruption comes at a fragile time, as the global economy emerges from the coronavirus pandemic, which has rumbled through supply chains and fueled inflation.
Ms. Yellen plans to note that low-income countries continue to need help to deal with their debt burdens and to call on international financial institutions to improve the distribution of vaccines to developing countries.
“As long as this pandemic rages anywhere in the world, the American people will always be vulnerable to new variants,” Yellen said.