The attack on Syria may have an effect on the US economy and the UK and France may also suffer. Will the recent goings on in Syria affect the US economy? The attack on Syria by US forces will not be universally viewed as a strike for democracy.
Russia takes a more pragmatic view and is accusing American of warmongering. Irrespective of the truth or falsity of this statement, it is difficult for the US, UK, and EU to justify it. How will this affect the US economy and that of these other two countries?
Putin’s Response To the Attack on Syria
It may seem to many that the strikes on Syria were fully justified on humanitarian grounds. However, the political and economic implications of such an attack may be more significant than the relatively inexperienced leaders of the US, France and the UK likely realize. The action may have had more credence had it been an EU strike.
The leaders of the US, UK, and France have only 4 years combined experience as leaders of their country. Vladimir Putin has had six years experience ruling Russia, and he will not take this strike lightly. What will be his response what form will Putin’s “consequences” take? Whatever they are they will not be good for any of the three countries involved.
US Economy Needs to Strengthen?
The US economy is improving and a recession seems unlikely. Analysts expect the yield curve to steepen which would rule out the possibility of an imminent recession. Some expect the US economy to strengthen, particularly with US unemployment at its lowest for 17 years and growth rate of 2.9% in the final quarter of last year.
The only unknown is Putin’s response to the Syria attacks. It is highly unlikely to be military, with the possibility of sparking off a major military conflict. Russia has the equipment and manpower to go head-to-head with the US on land, sea, and air make no mistake about that. But Putin is sensible enough to understand that a major military conflict would benefit neither country.
What are Russian ‘Consequences’?
President Putin appears to be taking a different approach and perhaps hit the US where it hurts most financially. There are many steps Russia can take to hurt the West. Cutting off the EU gas supply would be a serious blow for the EU and the UK. Russian firm Gazprom supplies around 40% of Europe’s gas. To lose this would be catastrophic.
Time will tell, but when Putin says there will be ‘consequences’ he means it. Then, the short-term treasury yields may become less of the factor in the US economy. Russia relies on overseas and overland trade for its economy, but Putin does not seem the kind of guy to lie down to Trump. For these reasons, the short term treasury yield is largely irrelevant in the greater scheme of things.
