The Russia-Ukraine war is set to dramatically redefine the global order (or the Grand Chessboard*), both economically and geopolitically. In the near-term, the trade and financial shocks from the conflict and associated sanctions are exacerbating global inflation pressures.
The concurrent hit to growth and to overall confidence is likely to be meaningful, but its magnitude and duration are uncertain. Europe is the most exposed region, with at least a modest recession very likely. While the US is relatively insulated for now, it is not immune either, particularly from the inflationary impacts of the war.
Energy and resource interdependencies are already shifting in what is certain to be a multi-year global adjustment, with implications across numerous asset classes.
* The “Grand Chessboard”, a theory put forward by influential Polish-American political scientist and presidential advisor Zbigniew Brzezinski to describe Cold War era Eurasian power dynamics.