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Does Russia Ukraine War Make New Stimulus Checks Possible?

By Aman Jain. Originally published at ValueWalk.

Russia Ukraine War make new stimulus checks possible

The COVID-19 crisis has triggered three rounds of stimulus checks so far. The pandemic is still not over, and a new crisis is already developing. Does that make new stimulus checks possible? The crisis that I am talking about here is the Russia Ukraine war. Experts believe that the ongoing war could further fuel inflation, which is already at a record high, and this could necessitate a fresh round of stimulus checks.


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What Makes New Stimulus Checks Possible?

As per the latest consumer prices data, the inflation rate in the U.S. surged 7.5% in January from a year earlier, the fastest in about forty years. Experts, however, fear that this could just be the start, and the inflationary pressures could ramp up even more in the coming weeks and months.

Gas and housing are two key areas that could be responsible for driving up consumer prices in the coming months. Gas prices were already high, and Russia’s invasion of Ukraine will further push up prices. International sanctions on Russia will impact the Russian energy supplies, and this would directly impact gas prices for U.S. consumers.

According to AAA, the average gas price in the U.S. was around $2.65 a year ago, and currently, it is over $4 a gallon. It is very certain that gas prices will further rise and possibly break the all-time high record as well.

Along with rising gas prices, the price growth in the housing market is another reason that could make new stimulus checks possible. Zillow, a leading real estate marketplace, expects the home price growth to peak at 21.6% year-over-year in May. Moreover, rent prices are expected to go up significantly as well.

A Tough Decision To Make

To support Americans amid such a rise in prices, many believe the Biden administration could come up with more stimulus checks. So far, there haven’t been any words from the White House on more stimulus checks, but people continue to demand more financial support. A Change.org petition asking for regular stimulus checks has garnered well over 3 million signatures.

Those against giving more stimulus checks argue that putting extra money in people’s pockets could further push up inflation. Many economists already argue that stimulus checks are a major reason for a spike in consumer prices, and giving people more money to spend could further fuel inflation.

While the Russia Ukraine war doesn’t seem to be ending, it will be interesting to see what action the Biden administration takes now to tackle the rising consumer prices. Though the ongoing crises do raise the prospects of stimulus checks, the White House and Congress have stayed mostly silent on the topic.

Instead, the Biden administration seems more interested in winning support for the Build Back Better legislation. Even the Build Back Better legislation includes a provision that could give recurring stimulus checks to Americans by extending the enhanced child tax credit.

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