Russia’s invasion of Ukraine places extra uncertainty into the outlook for the U.S. economy, one of President Joe Biden’s top economic advisors said Monday, though sanctions appear to be working.
“I would say that this has definitely clouded the outlook,” Council of Economic Advisers Chair Cecilia Rouse said at an event hosted by Politico. “It does look like our economic sanctions have been very effective.”
Rouse pointed to the Bank of Russia, the country’s central bank, more than doubling its interest rates early Monday to 20% from 9.5%. The Biden administration early Monday banned Americans and companies from doing business with the Bank of Russia, the Russian National Wealth Fund and the Ministry of Finance.
The announcement came two days after the U.S., U.K., Canada and the EU said they would block major Russian banks from SWIFT, take steps to stop Russia’s central bank from rescuing the nation’s economy and move to seize Russian oligarchs’ yachts and residences in the West.
“The noose is tightening -- Putin doesn’t have access to the resources he was counting on to get him through this war,” she said referring to Russian President Vladimir Putin.
The ruble continued to plunge against the dollar, with the currency losing a third of its value in offshore markets at one point Monday, hitting an all-time low of 109 per dollar in Moscow.
“The economic risks will hinge on the length of this war,” Rouse said.
Rouse added the biggest immediate concern for the U.S. is the impact on gas prices, but noted Biden is “working with allies to do what he can” to address it.
This article was provided by Bloomberg News.