Russia's war on Ukraine is likely to raise inflation and lower investment, US Federal Reserve Chair Jerome Powell said Thursday.

"We are going to see upward pressure on inflation, at least for a while," he said during testimony before the Senate Committee on Banking, Housing, and Urban Affairs.

Stressing record-high oil and natural gas prices, upward pressure on inflation could be seen due to Russia’s role in global energy and commodity markets, he said.

"What we know so far is that commodity prices have moved up significantly, energy prices in particular. That is going to work its way through the US economy in the form of higher inflation, at least in the short term," he said.

The war in Ukraine, western allies' sanctions on Moscow, and private businesses leaving Russia may also cause a decline in investment and spending, he said.

"We could see risk sentiment decline so you could see lower investment. You could see people hold back on spending. It is hard to see what the effect on both supply and demand will be," said Powell. "We need to be alert and nimble as we make decisions in what is quite a difficult environment.”/aa