White House says it’s monitoring Red Sea attacks; not seeing big impact on holiday products

FILE PHOTO: Houthi military helicopter flies over the Galaxy Leader cargo ship in the Red Sea in this photo released November 20, 2023. Houthi Military Media/Handout via REUTERS/ File Photo

WASHINGTON — The White House on Friday said it was closely monitoring Houthi attacks on ships in the Red Sea, but did not expect the situation to have a significant impact on holiday prices or the availability of products.

Lael Brainard, director of the White House National Economic Council, told reporters that the U.S. economy was proving resilient, with inflation having come down faster than even the more optimistic forecasts had indicated, the labor market rebounding, and growth remaining solid.

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But she said the administration remained keenly alert to risks, including issues such as Russia’s ongoing war in Ukraine and its potential to disrupt grain markets, and the evolving situation in the Red Sea.

“Geostrategic risks remain elevated. We see that also in the Red Sea, where we’re closely monitoring and we’re working with partners,” she said, adding that there was no evidence thus far to suggest an impact on prices or the availability of products.

The Houthi militant group, which controls vast amounts of territory in Yemen after years of war, since last month has fired drones and missiles at international vessels sailing through the Red Sea, attacks that it says respond to Israel’s assault on the Gaza Strip.

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The White House has repeatedly called for those attacks to stop. On Friday, it said Iran was “deeply involved” in planning operations against commercial vessels in the Red Sea, something Iran denies.

Brainard said Biden’s national security team was “very focused” on the situation in the Red Sea, given its importance to global shipping, and remained in constant communication with ocean shippers and countries in the region to ensure freedom of navigation and to bolster regional security.

Asked about the potential inflationary impact of the attacks, Brainard said: “Based on the information we have, diversion of vessels from the Suez Canal to the Cape of Good Hope is not anticipated to have a large effect on the availability of products for holiday shopping, but of course we will continue to monitor that.”