Business analyst Jill Schlesinger has suggested how the price of everyday essentials could rise dramatically because of Russia's invasion of Ukraine.
This morning, February 24, Russian President Vladimir Putin sent troops across the border into Ukraine in what he called a 'special military operation'.
As of this afternoon, more than 200 attacks had been carried out by Russia so far, including a series of missile launches and air attacks on planes and helicopters, with the invasion having been branded 'a threat to the entire world'.
On CBS Mornings, Schlesinger reflected on the wider impact of the invasion and specifically what it could mean for oil and gas prices and the stock market in the US.
For the first time since 2014, the price of a barrel of oil has reached more than $100, and despite the '40%' inflation in oil and gas prices over the last year, Schlesinger said costs are set to be 'headed [even] higher,' CBS Boston reports.
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She said: 'According to AAA we’re at about $3.54 nationally for a gallon of gas. If this persists, if this goes on, we could see oil and gas prices, utility prices, up even more.
'I think that what we’re seeing right now is that 7.5% inflation, we were expecting to drift a little bit higher. I’m talking to economists who say this could go up to 9% inflation. So everything is going to cost more.'
As a result of Russia and Ukraine being big exporters, the cost of metal, palladium, corn and wheat could also rise. Palladium is used in car's microchips.
Schlesinger explained that the invasion and its impact on the cost of everyday items and essentials could leave the Federal Reserve in 'a terrible bind'.
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'Here’s why – because they want to raise interest rates to control prices. That’s important. But at the same time, this is a conflict that could cause a lot of economic damage. And so the Fed is weighing not raising rates too quickly to slow down the economic recovery but trying to control those prices,' she explained.
The business analyst also warned that such rises could also be around 'for a while'.
'Whether it’s gas, whether it’s oil, whether it’s food, whether it’s the chips for your cars. We are stuck with high prices at least for a few more months, and maybe for as much as six months depending on how long this escalation lasts,' Schlesinger noted.
However, Schlesinger reassured that while 'it's scary', everyone should 'try to take a deep breath'.
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She concluded: 'These panic situations are rough. Try to just calm down, remain true to your plan. Markets are going to be volatile. If they go down big today they can go up big tomorrow. Try not to react. Stick to that game plan. Remember If you’re a long-term investor, these moments are real tests. Please try to stay calm and try to remind yourself I’m in it for the long term.'
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Poppy Bilderbeck