Last quarter’s focus was on the latest crisis triggered by Russia’s invasion of Ukraine. That conflict represents a major negative supply shock to the global economy, pushing down on economic activity while simultaneously pushing up on inflation. The dynamics of these effects, however, differ. While the inflationary impact was almost immediate, rippling out across the globe, the slowdown in economic activity has been more gradual. Against a backdrop of significant economic momentum as economies have reopened, central banks around the world have remained focused on inflation risks despite the looming slowdown. With further downside risks from the conflict possible and the potential for over-tightening by central banks, market concern around recession risks has grown.