Economist: Ukraine crisis could affect everything from food prices to interest rates

As Russian forces have moved into Ukraine, the downstream effects of the invasion could be felt across the globe, as well as in Washington state.

UW Russia expert: Ukraine could be worst war in Europe since 1945

As Windermere Chief Economist Matthew Gardner points out, Russia is the world’s third largest producer of oil after the United States and Saudi Arabia, and provides roughly 10% of the world’s oil supply.

“What is happening with Ukraine and Russia is going to push oil prices higher, and that is going to lead to increasing prices at the pumps,” Gardner told KIRO Newsradio, going on to note that an increase in the cost of oil will also increase transportation costs in kind.

That instability in the energy industry also might have the U.S. Federal Reserve “take a bit of a pause in terms of how frequently and to what degree they’re going to raise interest rates,” he added.

“It’s a significant issue for the Fed today,” he noted.

Ross: The lesson from Putin’s invasion of Ukraine is clear

Perhaps even more significant than that, though, is that both Russia and Ukraine “are critical suppliers of neon gas and palladium,” which are used to produce semiconductor chips.

“It’s going to hit new cars, which require a lot of these materials, and obviously the tech sector as well,” Gardner predicts.

On a larger scale, he warns that food prices — which have already been on the rise — could “be even more magnified until we get some sort of clarity as to what’s going on in Ukraine,” given that over a quarter of the world’s supply of wheat comes from Russia and Ukraine.

Listen to Gee Scott and Ursula Reutin weekday mornings from 9 a.m. – 12 p.m. on KIRO Newsradio, 97.3 FM. Subscribe to the podcast here.