The Ukrainian Crisis—A New Hazard Facing the U.S. Economy?

By: Dr. Lynn Reaser

ImageAs the Russians threatens to send more troops into the Ukraine and the U.S. counters with a pledge of economic and political sanctions, markets have seized up in fear.  Does the Russian invasion of Ukraine raise near-term concerns about the impact on the economy, particularly here in San Diego?

The answer is “yes,” even though the effects may not be large or long-lasting.  Any escalation of international tension is cause for concern.  Although the U.S. is not at risk of major losses in terms of vital imports or trade in general, financial markets will reflect any fears of a further deterioration in Russian-U.S. relations.  Falling stock prices will, in turn, impact consumer confidence and spending.  Ukraine, already struggling with a large debt burden, could be forced into default, raising fears about the financial exposure of various banks and other emerging markets.

San Diego’s economy may see little direct impact.  However, San Diego’s military community will be on alert and we probably all should be until tensions around the Black Sea hopefully ease.


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