"War: What is it Good For? Absolutely Nothing," Says A Large US Investment Firm
NDTV
Russia's invasion of Ukraine and Western countries' sanctions on Moscow has raised the risk of recessions in many countries, noted Charles Schwab.
Russia's invasion of Ukraine and the West's retaliation with sanctions on Moscow has raised the risk of recessions in many countries, which were already reeling from higher inflation and waning economic growth, just when the world had started to put the pandemic in the rearview mirror, noted Charles Schwab, a large US based investment management firm.
Financial markets have been whiplashed and remain volatile, unable to confidently price implications from the news flow given the complex state of the global economy.
"The titles of these reports are always courtesy of well known (and often more obscure) rock songs; but today, a few of the lyrics resonate emotionally from the song War by Edwin Starr," wrote Liz Ann Sonders, Chief Investment Strategist, with Kevin Gordon, a Senior Investment Research Specialist, at Charles Schwab, in a report titled: "War: What is it Good For? Absolutely Nothing."
"It's been an overwhelming two years, with Russia invading Ukraine just as it looked like we might be putting the COVID-19 virus in the rearview mirror. The immediate impact of the war on the US and international economies is via energy markets. Still, sanctions placed on Russian banking and payment systems have also led to significant volatility in currency markets. The significant flattening of the US yield curve and plunging GDP forecasts for this year's first quarter already pointed to rising recession risk…a war, clearly ups that ante," they noted.
