Ukraine invasion not as big for markets as inflation: Billionaire investor Carl Icahn

Billionaire investor and Icahn Enterprises founder Carl Icahn argued on Monday that inflation is the biggest economic problem amid the geopolitical unrest.

Icahn, who has decades of experience in the investment business, noted on "Varney & Co." on Monday that he has lived through the late 1970s when the U.S. experienced double-digit inflation, which prompted drastic action from the Federal Reserve.

"I think inflation is a major problem for us and I think that is what we have to deal with," Icahn told host Stuart Varney.  

"I lived through it in the 70s, and it’s not easy to put that genie back in the bottle."

Icahn made the comments as U.S. stocks curbed some of the losses midday as investors weigh the latest on Russia's invasion of Ukraine against the U.S. expanding sanctions against Russia's central bank by freezing all assets held by Americans.

Ticker	Security	Last	Change	Change %
I:COMP	NASDAQ COMPOSITE INDEX	19003.651134	+31.23	+0.16%
SP500	S&P 500	5969.34	+20.63	+0.35%
I:DJI	DOW JONES AVERAGES	44296.51	+426.16	+0.97%

The S&P 500 fell 0.3% on Monday and the Dow Jones Industrial Average dropped by nearly 200 points, erasing a 400+ point drop from earlier. 

Oil prices surged Monday, with U.S. benchmark crude nearing $96 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude hovered at $98 per barrel. 

Ticker	Security	Last	Change	Change %
USO	UNITED STATES OIL FUND - USD ACC	71.61	-0.11	-0.15%
BNO	UNITED STATES BRENT OIL FUND - USD ACC	29.00	+0.04	+0.14%

Inflation surged more than expected in January, notching another four-decade high.

The consumer price index rose 7.5% in January from a year ago, according to a Labor Department report released earlier this month, marking the fastest increase since February 1982, when inflation hit 7.6%. The CPI – which measures a bevy of goods ranging from gasoline and health care to groceries and rents – jumped 0.6% in the one-month period from December.

Price increases were widespread: Although energy prices rose just 0.9% in January from the previous month, they're still up 27% from last year. Gasoline, on average, costs 40% than it did last year. Food prices have also climbed 7% higher over the year. 

YELLEN: FEDERAL RESERVE WON'T ALLOW INFLATION TO REACH 1970S LEVELS

Icahn pointed to higher oil prices on Monday when discussing inflation. 

Last week, oil prices hit an eight-year high, briefly topping $105 a barrel for the first time since 2014 – and Russia's full-blown attack on Ukraine on Thursday could push prices even higher.  

"I think that this market possibly is overreacted to what’s going on in the Ukraine, but I don’t think that’s the problem we have. I think the problem we really have is there’s a much deeper one, which is inflation," Icahn stressed on Monday. 

The Federal Reserve late last month signaled it could "soon" raise interest rates for the first time in three years, paving the way for a March liftoff as policymakers seek to keep prices under control and combat the hottest inflation in nearly four decades. 

"I don’t think anybody can predict the exact timing of the market, and anybody trying to do it is just, I think, wasting time," Icahn told Varney. 

"But I think, look at a macro picture and if you lived this before, you have to realize that at this point, we’re sort of in a precipice."

He then noted that in terms of timing, it is hard to tell.

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"When it’s going to happen though, could be three years, five years, you don’t know, or three days," Icahn said. "I think that a catalyst was this Russian Ukrainian thing, but I think we should be able to get through that."

He stressed that he doesn’t want to be an "alarmist because nobody is sure when this is going to happen," but stressed that markets are "building toward it." 

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FOX Business’ Megan Henney contributed to this report.