On money – Inflation was already high, the war in Russia made it worse

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Russia’s invasion of Ukraine fueled rising prices on top of months of inflation. We’ll also look at the White House bracing for a tough inflation report and a push to legalize cannabis.

But first, find out why Kevin Bacon appeared in DC this weekend.

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How the Russian-Ukrainian War Drives Prices Up

Russia‘s invasion of Ukraine and the resulting sanctions imposed on Moscow are contributing to the global price spike that Americans are feeling throughout the economy, especially at the grocery store and at the gas pump.

Russia’s status as a major exporter of raw materials, especially oil and natural gas, as well as Ukraine’s position as a key agricultural supplier to regions such as Africa and the Middle East, make the conflict between the two countries a flashpoint for commodity prices, which were already on the rise due to the pandemic.

  • New Consumer Price Index (CPI) data to be released by the Labor Department on Tuesday is expected to show another sharp rise in monthly and annual inflation.
  • Consumer prices rose 7.9% in the year to February, and signs of high inflation in March are mounting.

“These countries export a lot of raw materials,” William Reinsch, a former undersecretary of commerce who is now an international trade analyst at the Center for Strategic and International Studies, said in an interview. “They tend to have a global price. And so when supply is tight, the consequence for Americans is that the price goes up because it goes up everywhere.

  • On Friday, the Food and Agriculture Organization of the United Nations (FAO) recorded a 12.6% increase in its benchmark food price index from February to March, a rise it called ” giant leap”.
  • March’s figures represent all-time highs for grains, vegetable oils and meats, while the sugar and dairy sectors also saw strong gains.
  • The war in Ukraine has also accelerated a steady rise in oil prices, driven in large part by the post-pandemic recovery. Fuel oil prices rose 6.7% and gasoline prices rose 6.6% in February alone, according to the CPI, as crude oil prices hit $100 a barrel.

We break it down here.

LEADING THE DAY

White House braces for ‘extraordinarily high’ inflation numbers

The White House is bracing for ‘extraordinarily high’ inflation numbers to be reflected in Tuesday’s Labor Department data, blaming it largely on rising energy costs stemming from the invasion Russian from Ukraine.

Monthly Consumer Price Index (CPI) data, a key indicator of inflation, is due out on Tuesday, and White House press secretary Jan Psaki said officials are ready to increased numbers.

“Thanks to the measures we have taken to deal with Putin’s price hike, we are in a better position than we were last month,” Psaki said, indirectly referring to the release of additional oil from the strategic oil reserve and calling on oil companies to avoid inflating prices.

“But we expect headline CPI inflation in March to be extraordinarily high, due to Putin’s price hike,” Psaki continued.

  • The average cost of a gallon of regular gasoline is $4.11 as of Monday, according to AAA. That number is down slightly from a month ago, when the average price per gallon was $4.33, but it’s still up about 50 cents since early March.
  • PSAKI has been pushing for Congress to pass the administration’s proposals on prescription drug pricing, child care and other areas that would reduce costs for families and help mitigate the effects of rising health costs. energy and food costs.

Rising prices for food, energy, housing and a wide range of consumer goods have weighed on household budgets amid an otherwise strong recovery from the COVID-19 pandemic. Administration officials have largely attributed it to the war in Ukraine, which has upended global energy markets and disrupted food supply chains.

Morgan Chalfant of The Hill has more on that here.

HARD SLEDGE

Democrats face rocky climb to get Senate approval of legal marijuana

Senate Majority Leader Charles Schumer (DN.Y.) faces significant hurdles in his legislative push to legalize marijuana, with resistance from Republicans and members of his own party threatening chances of a passage to the chamber high.

Schumer said his goal is to introduce a comprehensive marijuana reform bill later this month, weeks after the House passed a bill that would remove marijuana from the federal list of controlled substances. .

Republicans’ fierce opposition to legislation legalizing marijuana is one of the biggest hurdles Schumer faces in pushing a measure through the equally divided Senate, where Democrats would need the support of all of their members and at least minus 10 Republicans to make the bill into law.

  • Schumer will also struggle to unify Democrats on the way forward, as senses. Joe Manchin (DW.Va.) and Jeanne Shaheen (DN.H.) expressed reservations about recreational marijuana last week.
  • Cannabis executives, fearing the bill won’t pass the Senate, are pushing Schumer to prioritize bills with bipartisan support, like the SAFE Banking Act, which would allow cannabis companies to use banking services.

Aris and Karl have more here.

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LATEST FUND LAUNCH

Small business groups push for antitrust reform

Fifteen organizations representing small business interests sent a letter to congressional leaders on Monday calling for the introduction of a series of antitrust bills.

The bills, approved by the House Judiciary Committee last year on a bipartisan basis, are key to tackling the monopoly power of America’s biggest tech companies, groups led by the Progressive Institute for Local Self-Government say in non-profit.

“Concentrated market power is the greatest threat facing independent businesses, and the status quo in our digital markets is untenable,” the letter said.

  • The push from small business groups comes as tech companies and their business organizations have stepped up their lobbying against antitrust reform bills.
  • The bills advanced by the House committee have yet to get a floor vote despite a lack of clear support from leaders, as well as opposition from some California Democrats.

Chris Mills Rodrigo from The Hill has more here.

Good to know

House of Representatives cafeteria workers say their working conditions have become untenable, leading to unsanitary conditions in the kitchens that serve Congress.

For months, workers at the multiple cafeterias in the House of Representatives have been decrying working conditions imposed by Sodexo, the cafeteria services contractor, but their pleas have mostly fallen on deaf ears.

Here’s what else we’ve got our eyes on:

  • Consumer expectations for near-term inflation hit a record high last month, according to new data released Monday by the New York Federal Reserve.
  • The nation’s average gasoline price has fallen about eight cents over the past week and about 13 cents over the past two weeks, according to figures from the American Automobile Association (AAA).
  • Inflation has become a central factor as Congress prepares to negotiate how much money it should allocate to the Department of Defense in fiscal year 2023.
  • A majority of Americans support six recent climate change proposals from the Biden administration, according to the annual Gallup Environmental Poll released Monday.
  • While COVID-19 cases have remained low in the United States since the decline of the omicron wave this winter, the “stealth” variant BA.2 has reached the United States and is causing an increase in cases in some parts of the country , especially in parts of New York State.
  • The City of Philadelphia announced it would reinstate its indoor mask mandate later this month as COVID-19 cases soar in the city.

That’s all for today. Thanks for reading and check out The Hill’s Finances page for the latest news and coverage. Well see you tomorrow.

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