The geopolitical tensions related to Russia and Ukraine are creating uncertainty in global financial and commodity markets, the US Federal Reserve said in a report on Friday.
"Geopolitical tensions with Russia have also contributed to higher energy prices, including oil and natural gas," the Fed said in its monetary policy report submitted to the US Congress.
The Fed said demand for oil increased as the global economy recovered further from the pandemic, and oil prices continued climbing over the second half of 2021 and into this year.
"Inflation rose notably in many economies in the second half of last year, importantly boosted by higher energy and other commodity prices as well as supply chain constraints," it added.
The central bank stressed that upward pressure on inflation stems from the price increase of both goods and services in the US.
The Fed said it expects personal consumption expenditures (PCE) inflation to come at 2.6% in 2022, after it stood at 5.3% last year.
US economic growth rate is estimated at 4% for this year, down from 5.5% in 2021.
