U.S. Treasury Secretary Janet Yellen said Wednesday that the world could face “enormous economic repercussions” from Russia’s invasion of Ukraine, she testified before the House Financial Services Committee.
“Russia’s actions, including the atrocities committed against innocent Ukrainians in Bucha, are reprehensible, represent an unacceptable affront to the rules-based global order, and will have enormous economic repercussions for the world,” according to Yellen’s prepared remarks. While governments impose fresh sanctions on Russia, “sanctions against Russian oligarchs are not yet complete,” Yellen noted.
On top of new restrictions against Russia to further isolate the country’s economy from the rest of the globe, economists at Deutsche Bank assume the U.S. economy will fall into recession late next year. Also, the International Monetary Fund is looking to downgrade its outlook for global economic growth, having previously forecasted expansion at a rate of 4.4%, Bloomberg reported. Of course, the IMF and World Bank “will be critical partners in rebuilding Ukraine, alongside bilateral donors, and they also will provide vital support to neighboring countries welcoming refugees,” Yellen explained.
With regards to cryptocurrencies, such as Bitcoin (BTC-USD) and Ethereum (ETH-USD), potentially being used to circumvent sanctions, Yellen commented that the Treasury is monitoring any attempts to use crypto to evade sanctions.
Previously, (March 11) Yellen expected another year where inflation remains “uncomfortably high.“