MOLINE, Ill. — It's hard not to flinch or cringe as we watch the price of things like gasoline go up - and up... and up. What is causing it? How does the war in Ukraine relate?
GMQC Financial Expert Mark Grywacheski with the Quad Cities Investment Group joined us live Monday, March 14 on Good Morning Quad Cities. He said what's going on overseas had very little effect on the Department of Labor's Consumer Price Index for February, which reported that inflation now stands at 7.9% - a new 40-year high.
"Russia’s invasion of Ukraine was in the latter part of February along with many of the global sanctions that have since been imposed on Russia," Grywacheski said. "Before the invasion, Wall Street was expecting the inflation rate to jump to 7.6-7.7%. So, the 7.9% inflation rate actually reported in February was boosted only slightly by Russia’s invasion."
However, he warns that the conflict in Ukraine will drive inflation much higher in the upcoming months.
"Currently, more than 300 companies have ceased operations in Russia," he said. "Add to that the inherent destabilization of both Russia and much of eastern Europe and their respective supply chains of component parts and raw materials such as wheat, crude oil and various metals used in manufacturing. So, it’s going to make this existing environment of rising prices that much worse. Many are expecting inflation to quickly reach 10+% in the upcoming months."
Grywacheski said we will notice the biggest price increases on gasoline, food and clothing. What's more - he explained that as of January, this higher inflation equates to the average American household spending about an extra $5,000 per year.
"As this inflation continues to rise, that financial burden on American households will become even greater."
To see our entire conversation with Grywacheski, click the video above.