Economic Impact of Events

Since Russia’s invasion of Ukraine, natural gas prices in Europe have stayed far above those in the United States — with serious implications for competitiveness, energy security, and the transition to clean energy. In September 2025, European natural gas averaged $11.1 per MMBtu, 274% higher than the U.S. price of $3.0 per MMBtu — nearly four times as high. Before the crisis, in 2019, Europe’s price was $4.8 per MMBtu, already 87% above the U.S. level. Despite progress on diversifying supply and reducing demand, this persistent price gap underscores the structural challenges Europe faces as it shifts away from fossil fuels while maintaining industrial competitiveness. The long-term answer? Investing in energy efficiency, renewables, and electrification — the only sustainable way to reduce both dependency and exposure to volatile global gas markets.

Back on recession watch, Leading Indicator #2 – the FHA mortgage delinquency rate. This isn’t typically in lists of leading economic indicators, but it may be a proverbial canary in the coal mine in the current context. FHA borrowers have low to moderate incomes, with a median income of about $75,000 a year, and most are first-time homebuyers. Judging from the recent increase in the delinquency rate on FHA loans, these households are under mounting financial stress. This is despite the exceptionally low 4% unemployment rate and goes in part to the credit characteristics of the borrowers, including lower credit scores and downpayments. Even more important may be their high debt-to-income ratios. With mortgage rates and house prices as high as they are, borrowers have to shell out a big share of their income to their mortgage payment to get into a home. They may have gambled that rates would fall and could refinance, bringing down their payment. However, the Fed’s higher-for-longer rate policy and quantitative tightening have forestalled that exit strategy. Combine this with higher homeowner insurance premiums and property taxes, and borrowers struggle to make mortgage payments. What happens when the job market wobbles even a little bit? Thus, why this is a good statistic to include in our recession watch. Not that the financial troubles of FHA borrowers are enough to push the economy into recession. Indeed, high and middle-income mortgage borrowers are having no trouble making their payments at this time – the gap between the FHA delinquency rate and those on Fannie and Freddie loans has never been as large. But if the economy is headed for trouble, it is FHA borrowers who will signal it first. And they are. #rates #FHA #income #recessionwatch #fed

BREAKING: Landmark survey of USAID workers and partners captures the crisis in real-time. This week's USAID project terminations add urgency to Devex’s groundbreaking survey – insights reveal healthcare closures and thousands facing job losses. This is the first major survey on the impacts of the US funding cuts directly on USAID workers and partners. We gathered exclusive data from 1,155 implementing partners and 390 USAID employees and contractors. USAID staff report: - 93% want reform, but 81% say current approach is counterproductive - 77% say the funding freeze severely weakens national security - 87% believe actions strengthen China and Russia's position - Major concerns about humanitarian impacts including lives lost Implementing partners face: - 48% expect to slash over half of their workforce   - Decades of expertise vanishing overnight - 94% expect decreased program effectiveness - Operations grinding to halt across multiple continents On the ground: “In Syria, 900,000 people no longer have access to healthcare, drinking water, latrines, or shelter materials. In Sudan, 38 healthcare centers serving almost 550,000 people have closed.” "We lost staff who have been with us for 30 years. We lost institutional memory," reports one respondent.  Full report available below. #USAID #Aid #Development #Data

A new analysis in Nature Climate Change dissects the anatomy of why people deny climate change is happening, or that we should do anything about it. The conclusion: It's not about a lack of information. The authors argue that denial is not driven by ignorance or lack of information, but by six hardwired psychological mechanisms: 1. psychological distance 2. availability bias 3. cognitive dissonance 4. confirmation bias 5. loss aversion, and 6. existential anxiety. 7. Social identity It is not that people do not see the facts. It is that they cannot afford to accept them. 𝗧𝗵𝗲 𝗸𝗲𝘆 𝗳𝗶𝗻𝗱𝗶𝗻𝗴𝘀: 🔸 Denial is a shield. Rejecting climate science is a rational defense against anxiety and the fear of economic loss. When leaders frame climate action as a “job killer,” denial becomes a mechanism for protecting one’s livelihood and identity. 🔸 The Populist Trap. Politicians like Donald Trump and Scott Morrison have successfully weaponised these psychological biases, reframing environmental regulation as an elite attack on national sovereignty and working-class dignity. 🔸 Identity beats data. Because denial is rooted in group identity, facts from “outsiders” only reinforce resistance. The only effective counter-measures are trusted messengers (e.g., conservative leaders) and local framing, not more scientific charts. 𝗠𝘆 𝗧𝗮𝗸𝗲 We have spent decades trying to dismantle evolutionary psychology with logic. This paper shows it does not work. The gap between belief and action is not an information problem; it is an incentive problem embedded in institutions and economics. If the psychological barriers to belief are this high, we should stop spending capital trying to scale them. Converting denialists entrenched in identity politics is not a strategy that is worth continuing—it is a distraction. We do not need deniers to believe in climate science. We need them to buy the heat pump because it is cheaper, drive the EV because it is more efficient and make sustainable choices because they are better. When the profitable choice is the low-carbon choice, ideology collapses. Bypass the psychology. Fix the economics. Source: https://lnkd.in/eufTzdij #ClimateRisk #BehavioralEconomics #EnergyTransition #ClimatePolicy #Psychology #NatureClimateChange ___________ 𝘍𝘰𝘭𝘭𝘰𝘸 𝘮𝘦 𝘰𝘯 𝘓𝘪𝘯𝘬𝘦𝘥𝘐𝘯: Scott Kelly

As we continue to parse the latest consumer price index and producer price index data, it's becoming clear that we are indeed seeing signs of prices trending up more strongly than they were at the start of the year. One metric where this is most apparent is the Cleveland Fed's median CPI (https://lnkd.in/g8sfQd2E), which reports the median price change amongst the categories tracked by the CPI (https://lnkd.in/gBpTca8B). One chart below showing the year-over-year percent change in the median CPI. Thoughts: •From 2012 through 2019, the median CPI showed year-over-year increases between a tight band of 2-3%. That figure increased substantially with the strong demand (due to fiscal policy [e.g., stimulus checks], loose monetary policy [e.g., near-0 federal funds rate]) and a commodity market shock with Russia invading Ukraine during the 2021 and 2022 period. •2023 and 2024 saw progress in the median CPI's year-over-year change declining back towards a figure more consistent with where the FOMC wants to see inflation. •Now the concern: after reaching a post-2022 low in May 2025, the year-over-year percent change in median CPI is rising again and was 3.65% in July. Given July's producer price index data came in much higher than forecast, there is reason to expect these higher prices will materialize at the consumer level over the coming months. Critically, this is happening with demand conditions being relatively weak AND crude oil prices are down 16% year-over-year as of July. Let that sink in: demand is weak, and the most important commodity is cheaper, yet median CPI is starting to accelerate. Implication: we are starting to see evidence of tariff-driven inflation. I will be curious to see how the FOMC balances its dual mandate of price stability and full employment given there is also clear evidence that the labor market is also lukewarm. My concern: if we would see a 50-basis point cut in September that spurs demand, firms would feel much more confident that they could raise prices to pass along tariff-driven costs. That could put the FOMC in a position to need to increase rates again in 2026, which isn't what they want. #supplychain #economics #shipsandshipping #freight

🛰️ The front line in #Ukraine is visible from space. Russia's full-scale invasion has left many #farming fields in Ukraine inaccessible or within occupied territory. ☝️ Thousands of square kilometers of Europe's most fertile land are inaccessible for #agriculture and probably contaminated for decades by mines, UXO and poisonous remnants. #NASA Harvest estimated in 2023 that “between 5.2 and 6.9 million acres (2.1-2.8 million hectares) of farmland have been abandoned as a result of the war since its beginning.” The Food and Agriculture Organization of the #UN estimated that due to the Russian invasion and the resulting fighting 2.8 million hectare (almost 7 million acres) of arable land cannot be cultivated. 📉 According to those numbers and the satellite pictures shown, we can assume that the arrival of the Russian army in Ukraine is worse and due to its longevity of the UXO problem more impactful than the almost biblical locust invasion of 2020 in Eastern Africa and Asia, when 2.25 million hectare of cultivated land was destroyed. Russia's illegal invasion of Ukraine doesn't just hurt Ukraine. It hurts most of the developing world, who relies on Ukrainian #food products. 🌾 For example, absence of Ukrainian grain drove up grain prices worldwide, increasing the costs of living for those most vulnerable. This is why russian aggression 𝐡𝐮𝐫𝐭𝐬 people worldwide. #Satellite #Intelligence #StandWithUkraine 🇺🇦

A 1°C rise in temperature is a poverty multiplier. New global evidence based on subnational data from 130 countries shows that each additional degree of warming: ✖️ Increases poverty by 0.63–1.18 percentage points ✖️ Raises inequality by 1.3–1.9% (Gini index) ✖️ Pushes 62–99 million more people into poverty by 2030 compared to a world without climate change The impacts are not evenly distributed. They are strongest in poorer countries, especially where agriculture dominates livelihoods, and are particularly acute across Sub-Saharan Africa. When we look only at national averages, much of the damage disappears. But subnational analysis reveals the real story: large, localized climate shocks interacting with poverty, inequality, and vulnerability. This matters for policy, finance, and development planning. If we underestimate climate risk by relying on national-level data, we: 1️⃣ Misprice climate risk 2️⃣ Misallocate adaptation finance 3️⃣ Miss the communities most exposed Climate change is no longer just about emissions trajectories. It is about distributional impacts, justice, and who pays the price first. This is why granular climate intelligence must sit at the heart of poverty reduction, adaptation, and development strategies. Because climate risk is not abstract. It is local, unequaland already reshaping development outcomes. read the article in Nature here 👇 https://lnkd.in/ehtBmjip

🚨 The Ripple Effect of the U.S. Aid Suspension on Global Humanitarian Response 🚨 The recent halt on U.S. foreign assistance—including ongoing projects—for 90 days will have severe consequences in some of the world’s most fragile contexts. In 2024, the U.S. was the largest donor for every country-based Humanitarian Response Plan (#HRP), accounting for 50.3% of total funding across 24 crisis-affected countries. This abrupt pause jeopardizes millions of lives, increasing risks of #foodinsecurity, #displacement, and the collapse of critical services, including #healthcare, #protection, and #shelter. 📉 What does this mean? 🔹 Countries like #ElSalvador 🇸🇻 (81.6%) and #Guatemala (84.5%) 🇬🇹 are almost entirely dependent on U.S. contributions, making them highly vulnerable. 🔹 A domino effect on global humanitarian aid – The funding freeze will likely disrupt food assistance, clean water access, education, and conflict stabilization programs worldwide. 🔹 Erosion of trust in #humanitarian #partnerships – Having firsthand experience in project implementation, I’ve seen how sudden funding disruptions impact aid delivery, contractual relationships, and community trust. Such uncertainty undermines years of humanitarian and development progress and weakens confidence between #donors, #INGOs, local #stakeholders and affected #communities. The #OCHA #FTS data below visualizes the scale of funding at risk and the level of U.S. aid dependency per country. 🔗 How should the humanitarian community respond? #HumanitarianAid #FundingCrisis #GlobalImpact #USForeignAid #CrisisResponse #DonorRelations #CrisisManagement

When commodity prices slip, the entire agriculture chain takes the hit!! The article opens by emphasizing the inherently cyclical nature of global agriculture, wherein unpredictable factors like weather changes, geopolitical tensions, and international trade disputes have historically caused rapid price swings. It explains that the boom in commodity prices seen in 2022 was partly fueled by disruptions linked to COVID-19 and the Russia-Ukraine conflict, which rattled supply chains and drove up costs for fertilizers and transportation. By 2023 and continuing into 2024, however, the global market shifted, and the FAO Food Price Index recorded a notable downward trend for cereals, vegetable oils, dairy, meat, and sugar—resting significantly below its 2022 peak. This decline was driven by easing supply chain pressures, better harvests in some key regions, and a general cooling of economic growth worldwide. As prices slid, farmers experienced thinner profit margins, complicating decisions about whether to invest in new seeds, fertilizers, or technologies. The ripple effects extend beyond the farm gate: seed companies, fertilizer producers, and farm machinery manufacturers have all confronted weaker demand as growers curb spending. Meanwhile, ag-tech startups—which once attracted robust venture capital investments—now face a more cautious funding environment. Their prospective customers, already squeezed by low commodity prices, often delay or downsize technology adoption in an effort to protect short-term cash flow. Overall, the piece highlights how cyclical downturns in agricultural commodities do not merely affect farmers but reverberate through every layer of the value chain. With production costs still relatively high and climate change concerns looming, stakeholders across the sector must adapt, whether by diversifying crops, refining supply chains, or embracing innovative tools. Despite current headwinds, the article underlines that strategic long-term planning and collaboration can help create a more resilient agriculture sector for future cycles.