Key US stock market indices - Dow Jones, NASDAQ, and S&P 500 - ended Tuesday with a new fall. From our point of view, this is a logical reaction of the stock market to what is happening in the world now. We have already said earlier that given the Fed's plans to tighten monetary policy, the stock market will experience problems in 2022-2023. Although a couple of weeks ago the main stock indices rose quite seriously, there is still a correction in the market in the first 3.5 months of 2022. Yesterday, the inflation report for March was published in the States. It became known that this indicator has already increased to 8.5% y/y, although a month earlier it was 7.9%. Thus, inflation continues to rise and does not react too strongly to all threats from Fed members. It does not react in any way to the end of the QE program and the first increase in the key rate. Therefore, as we said earlier, it will take quite a long time to lower inflation to the target level of 2%. We believe that at least 1.5 years and then, provided that the geopolitical situation does not worsen and a new war or military operation does NOT start anywhere in the world.
And I must say that a new military operation may well begin in the near future in Finland. And then in Sweden. The fact is that after Russia attacked Ukraine, Finns began to sign petitions and demand that their government joins NATO. And Moscow still does not want NATO military bases located somewhere near its borders. If Finland joins the Alliance, then NATO bases with medium and long-range missiles can be located only 200 km from St. Petersburg. Therefore, the Kremlin has repeatedly warned Stockholm and Helsinki that their attempt to join the Alliance will cause a backlash in Moscow. However, it seems that Stockholm and Helsinki are not afraid of threats from the Kremlin, just as the Kremlin is not afraid of new Western sanctions. In Scandinavia, they believe that you need to be on your guard with such a neighbor.
And at the same time, the first reports on the movement of military equipment on the border with Finland began to arrive yesterday. According to residents, there is an accumulation of military equipment on the borders in the same way as a few months ago near the Ukrainian border. Therefore, in the next couple of months, we may get a second military conflict in Europe, as the Finns and Swedes wanted to apply for NATO membership this summer. And there is a month and a half left until summer. And the Kremlin will not wait for the official entry of these countries into the Alliance, so as not to have a conflict with the entire Alliance later. There is not much news on Ukraine right now. One should only know that the military conflict continues, and negotiations continue via video link and do not give any result.
