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Money in a Minute for the Week Ending March 12, 2022

Every Saturday, I recap “news you can use” from the past week: a handful of short quotes from major (and often expensive) news sources, so you can stay up to date on the news that affects your money without spending a dime and in less than a minute.

Here are headlines and quotes from select money stories this week. At the end, you’ll find my take on the news.

Biden Caught Between Inflation and Calls to Ban Russian Oil (March 6, The Wall Street Journal):

President Biden is caught between conflicting demands that he tame rising consumer prices while banning Russian oil imports to punish Moscow for invading Ukraine, a sanction that would threaten even more inflation and raise pressure on allies with more dependence on oil imports.

How War in Ukraine Drives Up Inflation at U.S. Farms, Supermarkets, Retailers (March 6, The Wall Street Journal):

The conflict is stressing an already strained global supply chain, and its economic impact will likely be felt in households world-wide, at supermarkets, retailers and the gas pump. While higher costs will take time to work their way from producers to consumers, executives and analysts expect the war’s fallout to worsen inflation already stoked by shortages of goods and workers.

War fallout: U.S. economy to slow, Europe risks recession and Russia to suffer double-digit decline (March 6, CNBC):

The CNBC Rapid Update, the average of 14 forecasts for the U.S. economy, sees GDP rising by 3.2% this year, a modest 0.3% markdown from the February forecast, but still above-trend growth as the US continues to bounce back from the Omicron slowdown. …

Inflation estimates are 1.7 percentage points higher for this quarter and 1.6 percentage points for next. Inflation is expected to decline from 4.3% this year to 2.4% by year-end.

Traders Surrender to Recession Paranoia in Stock Market Rout (March 7, Bloomberg):

When it’s just the yield curve narrowing, or oil jumping, or stocks falling into a correction, maybe you can hold off on panicking over a recession.

When all three happen at once, the argument gets stronger that it’s time to take the threat seriously.

Cracks Are Showing in Consumers’ Tolerance for Inflation (March 7, Bloomberg):

As the conflict in Ukraine pushes up the costs of energy and food — Russian and Ukrainian wheat, for example — the inflationary pressure is set to intensify. And the first cracks in consumer demand can be expected to appear, especially in sales of groceries, big-ticket goods and mid-market apparel.

Goldman Sees U.S. Recession Risk as High as 35%, Cuts Forecast (March 11, Bloomberg):

Goldman Sachs Group Inc.’s economists warned the probability of a U.S. recession in the next year may be as much as 35% as they cut their forecasts for growth due to the hit from soaring oil prices and other fallout from the war in Ukraine.

My take on the week

You may not have realized it yet, but the world has changed.

Just as 9/11 permanently altered the world, Russia’s invasion of Ukraine is already having implications far beyond the explosion in prices for commodities like wheat, nickel and oil.

The world is now becoming increasingly aware of a major downside to a global economy — namely, critical resources potentially being held hostage by hostile governments. Solution? Unwinding globalization and producing more at home.

That may sound good, until one remembers the upside of outsourcing everything from raw materials to labor: lower prices. That’s the reason we went global in the first place.

If the global economy begins looking risky and countries become more insular, one likely side effect could be stubborn inflation.

This isn’t an immediate concern. If it happens, it’s something that will happen gradually over time. But it’s something I’m keeping an eye on, and you should as well.

As far as what’s in store in the immediate future, until there’s a resolution in Ukraine, expect stocks to be volatile, with major swings both up and down. My advice: Now’s not the time to buy the dips. It’s more of a time to lighten up on stocks when markets rally, especially those without proven, increasing earnings.

Should you choose not to lower your exposure to stocks, that’s fine. I haven’t. But I have lowered my expectations.

Check out my podcast

I hope having these news notes makes your life easier. Want something else that’s concise and impactful? Check out my weekly “Money!” podcasts. They’re brief, casual conversations with news recaps, as well as tips and tricks to make you richer.

You can listen right here on the Money Talks News website, or download them wherever you get your podcasts. Just look for Money! with Stacy Johnson.

Check them out: You’ll be glad you did!

About me

I founded Money Talks News in 1991. I’m a CPA, and I have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

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