Fed: US Federal Reserve wants to raise interest rates, Janet Yellen to import Russian oil

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Fed Director Lael Brainard: If inflation is high, the US Federal Reserve could also act more strongly

PHOTO: KEVIN LAMARQUE / REUTERS

In view of the high inflation, the US Federal Reserve wants to raise interest rates and probably shrink its balance sheet as early as May.

This is according to the minutes of the March 16 monetary policy meeting, released on Wednesday.

Accordingly, many of the monetary watchdogs believe it is appropriate that a large interest rate hike of half a percentage point or even several such increases in the future may be appropriate.

This applies if inflation risks remain elevated or even intensify.

At the March meeting, many members of the Open Market Committee responsible for interest rate policy were already in favor of taking such a large interest rate hike.

However, the committee decided to raise interest rates by a quarter of a point to the new interest rate level of 0.25 to 0.50 percent - probably also against the background of the uncertainty caused by the Ukraine war.

Fed Director Lael Brainard recently signaled an aggressive approach and emphasized that the central bank was also prepared to act more strongly if inflation developments required it.

Delivery bottlenecks in the wake of the corona crisis have led to consumer prices recently rising by 7.9 percent, more than they have in 40 years.

European countries are "very dependent" on Russian oil

According to US Treasury Secretary Janet Yellen, the global price of oil would probably "go through the roof" if Russian exports were completely blocked.

Many states, especially in Europe, are "very dependent" on Russian oil, Yellen said at a hearing in the US House of Representatives.

"We want to inflict maximum pain on Russia, but also be careful not to inflict undue pain on the Americans and our partners," Yellen said.

The US has banned imports of Russian oil because of the war of aggression in Ukraine - although imports made up only a small part of the US supply.

A complete blockade of Russian exports is currently not desirable in view of the high demand with roughly the same supply, said Yellen.

Yellen said that once other countries and producers increased their oil production, it might be possible to limit Russia's exports even further.

Crude oil prices have already risen significantly since Russia's conflict with Ukraine began.

jso/Reuters/dpa