Russia's economy will be 'devastated' by sanctions and further sanctions are under consideration, Janet Yellen says

New York(CNN Business) The United States and its allies are considering additional sanctions to punish Russia for "atrocities" committed in Ukraine even as existing sanctions deal a powerful blow to the Russian economy, US Treasury Secretary Janet Yellen said Thursday.

"The Russian economy will be devastated as a consequence of what we've already done, but we ... continue to consider further steps we can take," Yellen said during a Washington Post Live event.

Yellen did not detail specifics on what additional sanctions could be imposed, though she did note that Russia has not halted its invasion of Ukraine.

"We continue to work very closely with our allies to consider sanctions," Yellen said. "At this point, we are not seeing Russia back off the horrific war they started, an unprovoked invasion of the Ukrainian homeland. In fact, the atrocities they are committing against civilians seem to be intensifying. So, it's certainly appropriate for us to be working with our allies to consider further sanctions."

The Treasury secretary spelled out the economic and financial damage caused by Western sanctions imposed in recent weeks.

"We have isolated Russia financially. The ruble has been in a free fall. The Russian stock market is closed. Russia has been effectively shut out of the international financial system," Yellen said, adding that the Russian central bank's access to its reserves has been largely cut off.

Yellen conceded there is "certain" to be an economic effect on the United States and Europe from the sanctions, though she said officials have worked to minimize this.

"It's already pushed up global oil prices. We're seeing that ourselves in prices at the pump," Yellen said.

Asked if European allies will move to ban Russian oil and gas, Yellen reiterated that US officials recognize "not all countries are in the same position" to cut off shipments of Russian energy.

"We have very little dependence on Russian oil," Yellen said.

High inflation is a 'tremendous concern'

Yellen acknowledged on Thursday the high cost of living American families are grappling with as inflation hits a fresh 40-year high.

Yellen said high inflation is of "tremendous concern," though she noted this is a global phenomenon and one linked in many ways to disruptions caused by the Covid-19 pandemic.

Although inflation-adjusted wages have declined, Yellen pointed out that lower-wage workers have seen pay increases outpace inflation. After taking into account enhanced unemployment benefits and stimulus checks, Yellen said, "Americans have been doing pretty well."

"I don't want to say inflation is not a problem. Inflation is a problem," Yellen said while speaking at a Washington Post Live event.

Consumer prices soared by 7.9% in February from the year before, the biggest increase since January 1982, the government said Thursday.

Yellen said proposals put forward by the Biden administration would "meaningfully address costs that really burden" American households, including the cost of childcare, eldercare, healthcare and prescription drugs.

But the Treasury secretary also acknowledged the limited powers of the presidency to tame inflation in the short-term.

"Inflation is first and foremost the job of the Federal Reserve," said Yellen, the first woman to lead the Fed. "We have to look to the Federal Reserve to take steps to bring down inflation. And I have confidence the Fed will take the actions that are needed."

In a bid to ease inflation, the Fed is widely expected to raise interest rates next week, launching its first rate-hiking cycle since the one that began under Yellen in 2015.