As the Ukrainian leaders, military and people display incredible resolve and bravery in defending their country, the United States and its European allies implemented new, tougher sanctions against Russia over the weekend. Cutting off numerous Russian banks from the SWIFT payment system ratchets up pressure on the Russian economy but also comes at a cost to the West, especially for European countries already facing sky-high energy prices.
Equity markets are opening the week under pressure as investors face more uncertainty about the prospects for global economic growth and inflation. The Federal Reserve’s path to tighten monetary policy is also made more challenging as risks grow to financial stability in light of the new sanctions.
The economic calendar this week — which includes the February jobs report being released on Friday — will most likely take a back seat to events in Ukraine. Our hope is that news this morning of talks between Russia and Ukraine will lead to a peaceful resolution before the human costs of the war escalate.
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