US Economy and Markets Look Resilient Regarding the Russia-Ukraine Crisis

Monday 04 April 2022

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US Economy and Markets Look Resilient Regarding the Russia-Ukraine Crisis

April 4, 2022 | The  US  economy  has  proven  to  be  exceptionally  resilient  in  the  current  context.  We’ve witnessed  strong  GDP   growth  in  the  fourth   quarter,  mainly  stemming  from  inventory accumulation, with consumption running a little weaker. Overall, the inflation environment is more difficult today than it has been for the past 15-20 years. Supply constraint issues will take far longer to resolve given the conflict in Europe and due to the shortages in commodities and energy in particular. We can expect inflation to return to more reasonable levels in the next 12-18 months.

01 |  After an initial negative reaction to the Russia-Ukrainian conflict, US equities markets are now above their pre-war levels. US equity volatility has been lower  than that of Europe,  which  is  more  exposed  to  the  crisis and  to  the  economic downturn.

02 | Both the European Central Bank (ECB) and the US Federal Reserve were late to react to mounting inflation, the former more so than the latter, and the war has complicated  the  path  toward  policy  normalization. 

03 | Due to material inflationary pressures, we can expect some softening in consumption. Energy and housing prices are up significantly YoY, and these hikes are likely to dampen consumption.

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Important Information

Unless otherwise stated, all information contained in this document is from Amundi Asset Management US (Amundi US) and is as of April 4, 2022. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi US and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. Amundi Asset Management US is the US business of the Amundi Asset Management group of companies.

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