Russia’s invasion of Ukraine is imposing a severe stagflationary shock

Europe must deal with an even larger influx of refugees than in 2015. 

Federal Reserve chair Jay Powell initiated a series of interest rate increases, saying he was “acutely aware of the need to return the economy to price stability and determined to use our tools to do exactly that”. 

Speaking privately to the Financial Times, one senior European economic official added that the conflict would also require huge pan-European solidarity with Poland and other eastern European countries facing the largest burden of finding accommodation and support for the 3mn refugees that have already crossed the Ukrainian border, with many more millions expected.

The objective, in the Fed’s eyes, is to make monetary policy restrictive for the first time since the global financial crisis, with interest rates of almost 3 per cent.

The Big Read FT 18 March 2022

https://www.ft.com/content/0f7945f5-b269-4d13-9151-c1ac9ec6fddc