Inflation increased last month at the fastest pace in 40 years. Volatility remains high as equities finished the last week of February higher than expected, despite hints from the Fed that it may be raising interest rates further in March. While bonds outperformed U.S. Large Cap, they were still down for the month due to rising interest rates. The U.S. joins its European allies in imposing sanctions on Russia, affecting commodity prices, including metals and oil. As these prices increased, Commodities and Natural Resource Equities performed well.

As the conflict between Russia and Ukraine unfolds and the global response to Russia’s actions accelerates, Pathstone continues to closely monitor events. While our mission as a firm is to responsibly steward client assets, as individuals our thoughts are with those most directly impacted by the war and unfolding humanitarian crisis.

In this note, we reiterate Pathstone’s investment position and summarize our operational response to current events, including internal relief efforts. We also highlight an opportunity for clients to engage further in dialogue on these issues.

Today’s invasion of Ukraine directed by Russian President Vladimir Putin is being felt in financial markets around the world, triggering heightened volatility in equities and commodities.  While the direct economic impact of a war between Russia and Ukraine should be minimal given their relative size in the global economy, the potential ripple effects are significant. Key concerns center on further Russian expansion, China’s stance on Taiwan, as well as the potential for North Korea or Iran to use the distraction to their advantage. Financial markets don’t like uncertainty and that speaks to why we experienced market volatility today.