04.26.22 | Rethink

The explanation we accepted for last week’s sharp market decline was the J Powell line about tightening faster. Hmm. Maybe J Bullard’s talk about a 75 basis pt hike activated news-reading algos in an inherently fragile market. Or…

Consider that China’s economy impacts the global economy (Global includes the US) … and the Yuan other EM currencies.

And as Russia’s invasion of Ukraine continues and appears increasingly more likely to be protracted, remember – Ukraine has what Russia lacks … a productive geography (e.g. grain, oilseeds, coal) … and a river to the Black Sea. A protracted war, aimed at destroying Ukraine’s economy has the potential to kindle a global recession.

These geopolitical issues should be considered at least as important to the market as the Fed hike.