Inflation, sanctions and a recession?
Fears of an economic slowdown, or worse, a recession, are fueled by surging consumer prices and expectations that the Federal Reserve will aggressively raise interest rates in the US to curb inflation. While supply chain disruptions caused by the global pandemic were the initial culprit, Russia’s invasion of Ukraine added to price pressures. Sanctions against President Vladimir Putin, his government and oligarchs threatened to isolate Russian shipments, worsening an already precarious supply situation for oil (and several other commodities).
These concerns drove crude oil futures above $120 a barrel in New York in March. While prices have since fallen, they still stand at more than $100 compared with about $60 a year ago.