VI News Staff 4 years ago
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Exclusive: Russia-Ukraine conflict could cause inflation to hit 10%, new analysis finds

New York (CNN Business)The cost of living is already very high in America. The Russia-Ukraine crisis could make it even worse.

Oil prices have jumped well above $90 a barrel in recent weeks as the risk of a Russian invasion has increased.

If the Russia-Ukraine crisis drives oil to about $110 a barrel, inflation in the United States would exceed 10% on a year-over-year basis, according to a new analysis by RSM shared exclusively with CNN.

The US economy hasn't experienced 10% inflation since October 1981, according to government statistics.

"We're talking about a real short-term shock," said Joe Brusuelas, chief economist at RSM.

Russia is the world's second largest producer of both oil and natural gas and global oil supplies. And this crisis comes at a time when the world energy market is already struggling to keep up with demand. JPMorgan has warned that any disruption to Russia's oil flows would "easily" send oil to $120 a barrel.

"Heating the home and putting gasoline in the car will become more expensive in the immediate aftermath of a Russian invasion," Brusuelas said, adding that there would be a "shock to consumer confidence" and diminished corporate investment.

READ MORE: CNN

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