A finance executive revealed that the sanctions system adopted by the United States against Russia in response to the ongoing war in Ukraine will have unfavorable impacts on the home economy, as well as those of its allies.

Multiple sanctions have been rolled out by the United States against Russia since Moscow commenced its special military operation in Ukraine, aiming to de-militarize a NATO-integrated Kiev. 

Read more: Anti-Russia sanctions to impact world: IMF Chief

Many experts are concerned that the comprehensive penalties, which include measures against Russian officials, corporate leaders, and entire economic sectors, would have unexpected implications for the US and world economies.

"Yes, we are already seeing rising energy prices, which will lead to cost increases across the board," the New York-based executive told Sputnik.

Russia's agriculture flex 

The source, who spoke on condition of anonymity because they are not authorized to comment on the matter, added that, in addition to energy exports, Russia is a major producer of agricultural products, fertilizers, and base metals, the prices of which have surged since the announcements.

It is worth noting that US wheat futures have risen about 20% since the commencement of the military operation on February 24, with prices reaching $1,400 at one time, a 67% increase. Meanwhile, the prices of base metals — copper, lead, nickel, tin, aluminum, and zinc – are either approaching or have surpassed their historical highs.

Read more: EU proposes sanctions on Russian coal, shipping

According to the banker, these statistics signal that Americans and other Westerners should brace themselves for food price increases or perhaps shortages this summer. Russia is not only a major exporter of energy and fertilizers, the world's largest country and Ukraine combined account for nearly 70% of sunflower seed and safflower oil production, according to the Observatory of Economic Complexity.

US President Joe Biden and other Western officials have warned of potential food shortages in the coming months.

While soaring prices and supply chain issues were to be expected, the executive warned of "unforeseen" consequences in the financial markets.

Read more: US has interest in undermining Russia as energy supplier: Blinken

"There is also another unforeseen effect: From sanctioning big Russian corporations and banks, and, even more importantly, the [Russian] Central Bank, there is a potential of cascading counterparty risk events that are impossible to predict at the moment," the source said.

Recession is possible 

Experts believe increased money supply, as well as near-zero interest rates, are more responsible for the out-of-control prices than any geopolitical tremors, the source said.

While raising interest rates is vital to cool growing inflation levels, the CEO feels the measures are a precursor to America's first recession since the 2008 global financial crisis.

"Last year the US economy grew at the pace not seen since 1984. However, at the start of this year, many economists dialed down their forecasts for economic growth. The main concerns are: the receding fiscal stimulus and planned interest rate hikes throughout the year intended to fight inflation. Slow economic growth coupled with high inflation is usually called ‘stagflation'," the source said.

However, in this fragile economic environment, aggressive interest rate hikes, which are indeed required to tame this roaring inflation not seen for decades, may throw the economy into a recession," the source added.

Conflict impacts EU

More than a month into the crisis it is increasingly certain that most, if not all, countries around the world will be impacted financially. However, Europe will feel the bigger impact of sanctions exchanges, the source said.

Read more: Spanish residents reduce electricity, fuel consumption

"Between North America and Europe, the latter should be affected the most as it has very limited internal energy sources and depends largely on imports," the banker said.

According to Eurostat, as of 2019, European Union member states were 61% dependent on energy imports, with the majority of imports coming from Russia, which Moscow is increasingly restricting in the face of sanctions and hostile rhetoric.