Nicole Servi

So initially you're going to get a shock and we've seen that already in crude oil and gasoline.

But let's say that this conflict magically ended four weeks in, then that shock would have truly been transitory in nature.

That's that scary word transitory.

Got to move.

I try not to say it too often.

But what we've seen is this conflict hasn't proven to be transitory, right?

It's actually stuck around.

And so what that means is that inflation is just going to be all that more persistent.

You're going to see higher transportation costs bleed into other areas as well.

There is a growth risk here, too, yes?

Yes, particularly for economies that are really reliant on imported oil.

I would say the United States in particular is not in that situation, but many economies across the globe are.

Yeah, this matters for you.

I think in particular, going back to what we're talking about, just not even the inflation.

So your prices are going to be rising.

But the fiscal situation of the U.S.

government, if you think about, again, rising interest costs, that's just going to make our interest expenses rise even more.

And if you look at the share, the composition of the federal budget right now, we're actually spending more on just interest expenses, financing costs than we are on national defense.

And so the more that we have this growth in interest expenses, the less the U.S.

government can afford to spend on particularly discretionary categories.