Janet Yellen has told Sky News the United States can “certainly” afford wars on two fronts, as the conflict between Israel and Hamas threatens stability in the Middle East and it continues to support Ukraine’s fight against Russia.

Talking exclusively to Wilfred Frost ahead of a meeting of finance minsters in Luxembourg, the US Treasury secretary said the economy and public finances were in good shape to ensure backing for US interests abroad.

She said it remained too early to understand the economic ramifications of the latest conflict, with oil and natural gas prices remaining volatile amid growing concerns of a wider war in the Middle East.

Those elements were key factors behind the energy-driven cost of living crisis that started facing Western economies last year.

Israel-Gaza latest: Hospital power running out ‘within 24 hours’

She pointed to a big easing in inflation but appealed for Republicans to fill the void left by the removal from office of House of Representatives speaker Kevin McCarthy, in order for greater financial support to flow.

“We do need to come up with funds, both for Israel and for Ukraine. This is a priority”, Ms Yellen said.

Please use Chrome browser for a more accessible video player


0:35

Palestinian PM: ‘We are not animals’

“It’s really up to the House to find, seat a speaker and to put us in a position where legislation can be passed.”

She added: “We stand with Israel. America has also made clear to Israel, we’re working very closely with the Israelis, that they have a right to defend themselves. But it’s important to try to spare innocent civilian lives to the maximum extent possible.”

Please use Chrome browser for a more accessible video player

‘There is no humanitarian crisis in Gaza’

“America can certainly afford to stand with Israel and to support Israel’s military needs and we also can and must support Ukraine in its struggle against Russia.”

Ms Yellen’s remarks followed her visit to the IMF/World Bank conference in Morocco last week when the hot topic was the potential ramifications of the Israel-Hamas conflict.

Iran has warned Israel against a full-scale ground operation in Gaza in response to the Hamas incursion over a week ago.

Read more:
‘Bodies of tortured dead show Hamas has changed’
Netanyahu ‘shoudn’t lead Israel’, former PM says
Couple’s desperate messages before massacre revealed
How the war has escalated since shocking surprise attack

Foreign minister Hossein Amirabdollahian said his country could not remain an observer in that event.

“If the Zionist aggressions do not stop, the hands of all parties in the region are on the trigger,” he said.

When asked if there was more that the US Treasury could do to pressure Iran from not getting involved in the war, Ms Yellen responded: “I know that there are diplomatic conversations that are taking place. But I’m not going to go into details about them.”