Yahoo Finance's Rick Newman joins the Live show to discuss how Russia could disrupt the U.S. 2022 midterm elections, the Russia-Ukraine war's impact on global food and energy markets, rising oil and energy prices, and inflation.
BRIAN SOZZI: All right, hard turn here. American security experts expect Russian hackers to attack voting systems and stir up trouble in the final days before the midterm elections on November 8. Yahoo! Finance Senior Columnist Rick Newman is here for more. Rick, interesting story you're working here.
RICK NEWMAN: Yeah, and my point is that Vladimir Putin, the President of Russia. He is already interfering in the US election. And it's not in the familiar ways as much that we saw in 2016 and 2020 with disinformation on social media. It's through inflation.
What is the biggest issue for voters right now? It is the economy and it's inflation. Now, in the beginning of the year, shortly after Russia invaded Ukraine, Biden-- President Biden used this phrase, "the Putin price hike," to explain away rising oil and gasoline prices. And that wasn't really the case at the time.
But we now have a different kind of inflation. It is not oil and gasoline prices anymore. I'm going to isolate two things here. It's food and it's natural gas. People do not see the price of natural gas the way they see the price of gasoline.
But we've got soaring natural gas prices all around the world. That is because of the Russian war in Ukraine and the energy war that goes along with that. That is raising prices here, not by as much as it is in Europe. But they are going up, we're going to feel that.
That passes through to food prices because natural gas produces electricity. You need electricity to process food. There are other factors pushing up food prices that go back to the Russian war in Ukraine and sanctions related to that. So all of this, these are all major factors that are keeping inflation high in the United States, still 8.2%. And this is President Biden's principal problem right now.
BRAD SMITH: And so for the oil reserves that are slated to be released, you know, how does that kind of play and factor into the Biden administration's strategy, at least at this point?
RICK NEWMAN: So let's talk about oil for a second. So oil prices right now, last I looked, US oil around $84 a barrel. That is lower than the price before Russia invaded Ukraine on February 24. So oil markets have normalized. Gas prices have not come down all the way to where they were before February 24, but they're getting pretty close. And that market has stabilized.
And President Biden did release oil from the Strategic Reserve. That's a small part of it. The biggest reason the oil market has stabilized is we have a global slowdown, especially in China. So demand for oil has just come down in a way we should be happy about that.
The inflation story has since shifted. And it's over to these other things. I mean, food inflation, latest numbers are 13% year-over-year. That is a big ask for a lot of people. Food is 12% of the typical household's budget, gasoline only 3%. So it's harder to absorb food inflation. And that food inflation looks pretty persistent at this point. It's going to be hard to get that down.
JULIE HYMAN: So bring it back around to politics for us for a second, because the proxy for President Biden's polling, for example, and tied in with the midterms as well, has been the gasoline price because it's that one sticker price, it's easy to see. Food, while everybody feels it, you don't have that one sort of thing that's symbolic of it.
RICK NEWMAN: Right.
JULIE HYMAN: So how is this going to play, as gasoline comes down and food continues to go up?
RICK NEWMAN: So you're right, so there has been a fairly direct correlation between gas prices and President Biden's approval rating. So the gas prices go up, Biden's approval goes down and vise versa. So that was all improving for Biden. The Democrats had momentum as gas prices were coming down sharply.
But food-- then food inflation started to go up. And I think most people don't look at the CPI numbers in a spreadsheet the way I do every time the numbers come out. But people know when stuff gets more expensive. And they-- and they know that their paycheck is not going up by the same amount as expenses. And there's going to be another shock coming.
People are just starting to see this in utility bills this summer because natural gas, which is the main way we generate electricity, that is going-- that is higher than it was this time last year. And that is going to mean higher heating and electricity prices over the summer. So people know-- they know something's wrong, and they're right about that.
So you know, the midterm elections are a referendum on the president and his party. And normally, the president's party does lose seats in Congress. And it does look like that's what's gonna happen here.