U.S. Treasury Secretary Janet Yellen warned on Wednesday of major global economic fallout from Russia’s invasion of Ukraine, including escalating inflation, admitting the brunt of the impact was being felt by America's middle class.

She also said that disastrous disruptions of the global supply chain of food and energy will occur.

"Russia’s actions represent an unacceptable affront to the rules-based, global order, and will have enormous economic repercussions in Ukraine and beyond," Yellen said during an annual appearance in front of the House Financial Services Committee.

Yellen admitted that the U.S. ban on Russian oil imports will negatively impact already surging energy prices, with the cost of gas for consumers at all-time highs.

"We think it's a price that's important to pay to punish Russia for what it's doing in Ukraine," she said. "But energy prices are going up, the price of wheat and corn that Russia and Ukraine produce are going up and metals that play an important industrial role – nickel, titanium, palladium – the cost of those things are going up. This is going to escalate inflationary pressures as well."

Yellen, responding to a question about 40-year high inflation, said: “Of course it erodes the ability of households to purchase a wider range of good and services. But remember that especially for the lowest income Americans, wage increases have been more rapid than inflation.”

When grilled about her statement that wages are keeping up with inflation for low income Americans, Yellen repeated that “their wage gains have exceeded inflation.” But when pressed again, she admitted that “prices increases have exceeded the wage gains for middle class Americans” over the last year.

Her testimony came as the White House and its EU and G7 counterparts were working on a set of new sanctions on Russia, including an American ban on new investments in the country.