Market & Topical Perspectives

Ukraine/Russia Update: Uncertainty Reigns

Ukraine/Russia Update: Uncertainty Reigns

A few weeks into the war in Ukraine, the West has remained steadfast in its commitment to avoid putting boots on the ground in eastern Europe. Instead, it has chosen to wield its economic might to isolate Russia from the global economy.

Key Takeaways

  • Key-Takeaway

    While first-order consequences of the war can be forecast and managed to some degree, its second- and third-order consequences may be far more impactful and present significant long-term uncertainty to economies and financial markets.

  • Key-Takeaway

    The supply-chain disruptions resulting from the war in Ukraine and sanctions against Russia are far-reaching and likely to have inflationary consequences in a world already struggling to contain price pressures. Stagflation—weak economic output and high inflation—is a potential result.

  • Key-Takeaway

    Geopolitical discord is a reminder that oil, the world’s most consumed commodity, has value as a potential geopolitical hedge and that energy security is paramount to government interest.

  • Key-Takeaway

    In an uncertain world, we believe it’s important to consider investments simultaneously for opportunity and for ballast.

     

    Views expressed are as of March 14, 2022