- March 04, 2022
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- May 20, 2025
Russia has been waging a war of aggression against Ukraine since February 24 of this year. The humanitarian need is appalling. The consequences for the security architecture in Europe and the world order are not yet foreseeable. But the economic consequences of the invasion will also be severe. The G7, the EU and the U.S. have imposed comprehensive and tough sanctions against Russia. These target, among other things, the Russian financial, energy and transportation sectors, freeze foreign assets of oligarchs and ban them from entering the West. Several Russian Federation banks have been excluded from the SWIFT international financial transaction system. It is clear that these punitive measures will also have a negative impact on Europe and the United States.
All this is also likely to have an effect on inflation rates in the U.S. and Europe, which are currently far from the two percent target anyway. In January of this year, the U.S. recorded an inflation rate of 7.5 percent compared to the same month last year. This is the highest value in 40 years. In Germany, inflation in the same period was 4.9 percent and in the euro zone 5.1 percent. An end to this development is not yet in sight. The ultra-loose monetary policy of the central banks, i.e. the Federal Reserve and the European Central Bank, has contributed to this high level of inflation. Higher oil and gas prices, as well as strained supply chains and prolonged material shortages, are considered to be other important drivers. The Fed’s Board of Governors and the Governing Council of the ECB meet regularly to decide on appropriate monetary policy measures to reduce price increases.
How are higher energy prices and growing energy demand affecting inflation? What role does Russia’s war against Ukraine play as an additional inflation driver in terms of even higher gas prices? To what extent do supply chain problems and shortages of inputs and intermediates affect overall price increases? How will Russia’s partial exclusion from SWIFT affect the global economy? Will the steps announced by Fed Chairman Powell this year to raise key interest rates in the U.S. put downward pressure on the inflation rate? To what extent does the current high inflation or potential easing have political consequences for U.S. President Biden and the Democratic Party? Why is ECB President Lagarde, unlike her U.S. counterpart Powell, so cautious about scaling back or stopping bond-buying programs and raising key interest rates in the eurozone? Podcast hosts David Deißner, Atlantik-Brücke, and Stormy-Annika Mildner, Aspen Institute Germany, discuss these questions with Sophie Schimansky, Deputy Editor in Chief of Vienna-based Forbes DACH, and Prof. Dr. Galina Kolev, Senior Economist in the International Economic Order and Business Cycle competence area at the Institut der Deutschen Wirtschaft (IW) in Cologne.
“America’s Choice – Der USA-Podcast” is a German-language podcast on U.S. politics, co-produced by the Aspen Institute Germany and the Atlantik-Brücke. The podcast is available on Spotify, Apple Podcasts, and other platforms.
