JACKSONVILLE, Fla. – An armed conflict between Russia and Ukraine could have dire financial consequences for people in North Florida.
U.S. steelmakers rely on Russia and Ukraine for iron and steel slab production, and Russia is also one of the world’s biggest suppliers of precious metals for electronics.
Financial experts say a drawn-out conflict could result in higher prices for stoves, microwaves and even cellphones, as well as a global increase in the price of food and gas.
The situation in Ukraine could cause problems for millions of Americans because of Russia’s and Ukraine’s connections to the agricultural market. Russia is the world’s top exporter of wheat, while Ukraine is an exporter of both wheat and corn. A conflict could interfere with shipments or make inflation even worse. It’s just one of many worst-case scenarios.
“In addition to that, Russia being the world one of the world’s biggest suppliers of nickel, aluminum palladium, these things are used for kitchen appliances, cellphones, so if there’s a disruption there, we’ll see some increases in prices,” said certified financial planner Titus Pittman with Genesis Financial Partners.
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Pittman also says gas prices could jump again because Russia is the world’s second-largest producer of oil. Some analysts say a conflict could send the price of oil to over $100 a barrel — prices that haven’t been that high in seven years. Pittman says the U.S. stock market also hates uncertainty, and bad news — in the short term.
″Back in 2014, when Russia invaded Ukraine and took over Crimea, we did have a dip in the stock market after some unsettling news, however, in 2014, the stock market itself returned over 13.6%,” Pittman said.
A drawn-out conflict could also mean you might have to pay more in interest on your next loan, as the Federal Reserve is already hinting at raising interest rates. Further inflation could trigger the fed to move faster.
“This is not a good situation. We have to reassure people that, we’re going to defend our inflation target, and we’re going to get inflation back to 2%,” said James Bullard, president and CEO of St. Louis Federal Reserve.
There’s also a lot of uncertainty on possible sanctions the U.S. could put on Russia if it invades. Sanctions could impact the aluminum market, which Russia has a stronghold on, only second to China.