During the fourth quarter, U.S. Gross Domestic Product increased by 7%, likely due to an increase in exports, increase in personal consumption, and a slightly lower government spending budget that was offset by state and local spending. The growth is expected to cool down later in 2022 as we expect the Fed to raise the interest rate, and multiple more rounds of stimulus packages. Rising tension between Russia and Ukraine could affect the global energy market since Russia provides roughly 10% of the global demand for oil, and it provides Europe roughly half of its natural gas. The conflict will most likely lead to global uncertainty, which will cause investors to pour money into the U.S. dollars, causing the currency’s value to go up; it could possibly make United States imports cheaper.
All these factors are signs that the US is recovering from Covid-19. There are no winners in any war. Some lose wealth, some lose territories, and some lose lives. The ruble climbs off a record low, which is a result of Russia's aggression on Ukraine. In my opinion, all conflict should be resolved without people loses.
ReplyDeleteConsumer and producer expectations for the future play an important role in determining how the markets will move so obviously Russian invasion of Ukraine is likely to affect the global economy. But we saw on Friday that the markets were recovering despite the initial drop.
ReplyDeleteThe war in Ukraine has caused many issues regarding the oil supply Russia has. Russia's oil is a necessity to 10% of the world and the sanctions that Biden has in place on Russia are going to affect the world as oil and gas prices are expected to again rise
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