Psaki warns price rises will be ‘extraordinarily elevated’ because of the war in Ukraine

President Joe Biden‘s administration tried to get ahead of more dire inflation news, as the March consumer price index report will be released Tuesday.

White House press secretary Jen Psaki said during Monday’s briefing that the White House expected ‘headline inflation to be extraordinarily elevated due to Putin‘s price hike.’   

Last month the same report showed a price increase of 7.9 per cent in February, marking the highest spike in 40 years. 

White House press secretary Jen Psaki

President Joe Biden’s (left) administration tried to get ahead of more dire inflation news, with press secretary Jen Psaki (right) saying Monday that ‘headline inflation to be extraordinarily elevated due to Putin’s price hike’ 

Biden's fuel announcement will coincide with the release of March's consumer price index report as the administration tries to get ahead of more dire inflation news. Last month's report showed the CPI jumping up to 7.9 per cent in February, the biggest hike in 40 years

On Tuesday the latest consumer price index report will be released by the Bureau of Labor Statistics. Last month’s report showed the CPI jumping up to 7.9 per cent in February, the biggest hike in 40 years

The Bureau of Labor Statistics releases the monthly reports, which measure prices for goods and services Americans buy – including gasoline, milk, eggs and cell phones. 

There are two versions of CPI data – a headline number, which includes all the prices consumers face, and core CPI, which excludes energy and food prices, which can be more volatile. 

‘We expect a large difference between core and headline inflation, reflecting the global disruptions in energy and food markets,’ Psaki said. ‘And, of course, we know that core inflation, you know, energy – the impact of energy, of course, on oil prices, gas prices, we expect that to continue to reflect what we’ve seen the increases be over the course of this invasion.’ 

She noted that since Russian President Vladimir Putin started amassing Russian troops on Ukraine’s border in January, gas prices have gone up more than 80 cents, with most of that increase happening last month.   

‘So that roughly 25 per cent increase in gas prices will drive tomorrow’s inflation reading,’ the press secretary said. ‘And certainly, it’s not a surprise to us, but we certainly think it will be reflected.’  

She also pointed to the average cost of a barrel of oil, which at the beginning of 2022 was $75 a barrel and now stands around $110 a barrel.   

Psaki noted that since Russian President Vladimir Putin started amassing Russian troops on Ukraine's border in January, gas prices have gone up more than 80 cents, with most of that increase happening last month

Psaki noted that since Russian President Vladimir Putin started amassing Russian troops on Ukraine’s border in January, gas prices have gone up more than 80 cents, with most of that increase happening last month

Psaki also used the opportunity to promote Biden’s Build Back Better bill, which was derailed by Democratic Sen. Joe Manchin in December. 

‘I will say that anytime there is heightened monthly data or inflation reporting or numbers, it is a reminder to us, to our allies on the Hill, and hopefully to many of the American people that we need to do more to reduce costs for the American people,’ Psaki said. ‘We have, of course, legislation that could do exactly that: cut the costs of childcare, of healthcare, of eldercare.’ 

‘These all have enormous impacts on people’s budgets; on when they’re, you know, doing those calculations at their kitchen table,’ she added. 

Later in the briefing a reported pointed out that rising inflation predated Putin’s war in Ukraine.   

‘We’ve never – we talked about inflation long before there was an invasion,’ Psaki answered. ‘But we also know that factually, if you look at the data, the average gas prices are up $1, 80 cents – 80 cents to $1. It’s about a 25 percent, we’ve seen, increase in gas prices since the start of this invasion. And we know energy prices is a big driver of the inflation data.’ 

‘We’ve long talked about, since at least I started this job since the President came into office, the impacts of the pandemic on supply chains, how that’s impacted a range of costs, and steps we’re taking to address those,’ the press secretary continued.