The year 2022 is a watershed moment in history, marked by economic, geopolitical, and environmental disruptions. Matters quickly escalated from fighting off what was hoped to be the pandemic’s final phase to a full-fledged war.
As the sun sets on 2022, here’s a look back at global macros that have had cascading effects in most asset classes, singling out equities. Throughout the year, the following global macroeconomic factors agitated the markets:
Russia-Ukraine war and its impact on the global economy
The biggest military conflict in Europe since World War II began on February 24, with Russia’s invasion of Ukraine. While Russian President Vladimir Putin has had restricted rational success in clarifying his goals for the invasion, it is widely assumed that it is simply the ambition of annexing Ukraine and expanding Russian territory.
Whatever the cause, the conflict had a frightening set of repercussions for the global economy. In response to Russia’s aggression, the West imposed economic sanctions on Russia to weaken its economy. Such restrictions include reducing Russia’s imports of oil and natural gas. This resulted in an oil supply shortage, which exacerbated inflation.