As the Russian invasion of Ukraine neared the end of its second week, emotions were running high. On March 7, speculation that the Biden Administration would announce new limitations on Russian energy imports sent prices of commodities higher, and prices of stocks lower.
U.S.-traded West Texas Intermediate Crude Oil surged to a 13-year high of $120 per barrel, wheat hit its highest price since 2009, and iron soared by 90%, nearly four times the price seen just days before.
Concurrently, investors, who have been worried about inflation for months, went into full-blown panic mode, selling off global stocks. The March 7 action was a trifecta of pain: The Dow Jones Industrial Average slipped into correction territory, falling 11% below its recent high; the S & P 500 had its worst day of 2022; and the Nasdaq composite entered a bear market, down more than 20% from its November high.
And that was just on March 7!
The following day, March 8, President Joe Biden announced that there would in fact be a ban on U.S. imports of Russian oil, gas and coal. While the U.S. only imports about 8% of Russian oil and petroleum products, the market reaction was swift: Crude oil added nearly another 5% to $125 per barrel (from $90 a month ago), and stocks fell by less than 1%, though it was a wild and volatile session.
Unfortunately, those two days are likely a harbinger of the short term: higher prices, due to the commodity surge and renewed pressures on the supply chain. Given that inflation was already smacking us in the face at every turn, there is a chance that high prices will start to impact consumers and businesses, who will in turn change their behaviors.
Before Ukraine, the anger and concern over the 40-year highs in the rate of inflation did not impact consumer consumption. Yes, we griped about it, but that didn't stop us from unleashing our post-COVID-19 spending sprees.
But as gas prices reach all-time nominal highs, some consumers will be forced to make choices about their limited resources. Additionally, there could be an even darker side to the shifts in our reactions to inflation. Analysts say that inflationary fears can trigger hoarding and demand for higher wages, which can create an inflationary spiral. Even if we don't get into hoarding mentality, higher prices could at least impact the economic growth that was expected for 2022 and at worst could trigger a full-blown recession.
If that news gets you down, perhaps it's time to look beyond yourself and chip in to help with the various Ukrainian relief efforts. The International Red Cross, CARE, Doctors Without Borders and the International Medical Corps are on the ground assisting in Ukraine and surrounding countries. You should also check in with your employer to see if they have established a Ukraine relief fund or provide a match to your donation.
It pains me to mention this, but with every tragedy comes some terrible scam. The Federal Trade Commission has issued a warning that there have already been instances of fake charities that look and sound like real ones.
The first step is to be defensive: Before you give, do some research. Don't assume a request to donate is legitimate because someone posted it on social media. Instead, check out the organization online and search for the name of the group, plus words like "review," "scam" or "complaint." You also should review the nonprofit at one of the charity rating organizations, such as Charity Navigator, CharityWatch or BBB Wise Giving Alliance.
Jill Schlesinger, CFP, is a CBS News business analyst. She welcomes comments and questions at firstname.lastname@example.org.