'Everything Is Going To Cost More,' Russia's Invasion Of Ukraine Could Hurt Your Finances For Months
BOSTON (CBS) - Russia's invasion of Ukraine will have an impact on your finances, at least for the next few months, according to CBS News business analyst Jill Schlesinger.
She says the most severe impact right now is on gas prices, as oil prices topped $100 a barrel for the first time since 2014.
"We've seen oil and gas prices up by 40% from a year ago. We're headed higher, unfortunately," she said on CBS Mornings Thursday. "According to AAA we're at about $3.54 nationally for a gallon of gas. If this persists, if this goes on, we could see oil and gas prices, utility prices, up even more."
Schlesinger said we could see prices for wheat and corn go up because Russia and Ukraine are big exporters. The same could happen for metal prices and palladium, which is used in microchips in cars.
Inflation is already at a 40-year high in the U.S. and the invasion could make it worse.
"I think that what we're seeing right now is that 7.5% inflation, we were expecting to drift a little bit higher. I'm talking to economists who say this could go up to 9% inflation," Schlesinger said.
"So everything is going to cost more. This, of course, puts the Federal Reserve in a terrible bind. Here's why - because they want to raise interest rates to control prices. That's important. But at the same time, this is a conflict that could cause a lot of economic damage. And so the Fed is weighing not raising rates too quickly to slow down the economic recovery but trying to control those prices."
Schlesinger said "just be prepared."
"We are going to see this level of high prices for a while, Whether it's gas, whether it's oil, whether it's food, whether it's the chips for your cars. We are stuck with high prices at least for a few more months, and maybe for as much as six months depending on how long this escalation lasts."
And what about those 401ks and retirement plans that rely so heavily on the stock market?
"Well, I always start with try to take a deep breath. It's scary. These panic situations are rough. Try to just calm down, remain true to your plan. Markets are going to be volatile," Schlesinger said.
"If they go down big today they can go up big tomorrow. Try not to react. Stick to that game plan. Remember If you're a long-term investor, these moments are real tests. Please try to stay calm and try to remind yourself I'm in it for the long term."
