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Last week, Citadel CEO Ken Griffin said America's sanctions on Russia will hurt the US "in a profound way."
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The US is already dealing with skyrocketing inflation, and the sanctions could exacerbate the pain of rising prices.
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Three experts shared what could happen next for American taxpayers.
As the US has imposed a range of economic sanctions on Russia in response to the invasion of Ukraine, several high-profile commentators have warned that Americans will also be on the receiving end of the pain cause by unprecedented financial measures.
Last week, Citadel CEO Ken Griffin said America's sanctions on Russia will hurt the US "in a profound way." The sanctions are weaponizing the dollar, he said, and it'll be American taxpayers that'll end up paying for it. Famed economist Mohamed El-Erian has also cautioned that the economic consequences of the Russia-Ukraine war will spill over into other countries.
In February, the Consumer Price Index rose 7.9% year-over-year, marking the fastest pace since 1982. Gas prices in the US have skyrocketed to levels not seen since 2008.
Sanctions could put even more stress on already weakened supply chains, adding to pricing pressures.
"The US is choosing to shorten supply chains to reduce dependence on undependable or hostile trading partners," Eric Leve, chief investment officer at wealth management firm, Bailard, told Insider.
Given Russia's role as a major wheat exporter, Leve anticipates the lack of supply to be seen on grocery shelves as global prices for the commodity surge. Russia is also a critical supplier of palladium and nickel, and supply chain disruptions in the auto and steel manufacturing will trickle into consumer products, and cause longer waits for electric vehicles.
Aleksandar Tomic, economist, professor, and associate dean at Boston College, says that while price spikes could be dramatic, they may not last long because the American economy is positioned to withstand it, unlike some European nations.
"Probably within a year the US will be able to stabilize its supply and production," Tomic told Insider. "Domestic production could pick up, but it'll be temporary, especially if the West isn't really serious about sanctions and willing to look the other way and keep trading with Russia."
The bigger issue, said Tomic, is if the war drags on and destroys the production capacity of Ukraine. Then the question is how quickly can the US and Europe create an entirely new segment of the supply chain.
"We will be seeing very high prices over the next year, with spikes in energy prices, food prices — everything at the consumer level. I would not be surprised if inflation hit double digits," he said.