FX.co ★ Ukrainian-Russian conflict, day 65. Lend-lease is accepted.

The key US stock market indices - Dow Jones, NASDAQ, and S&P 500 - ended Thursday with a slight increase. It is noteworthy that the last two stopped a step away from updating their minimums. However, we believe that this event is not far off. As has been said more than once, in 2022, a correction is the most likely scenario. And since the geopolitical situation is not improving, and the Fed has not yet given a single sign of abandoning its super aggressive plan to tighten monetary policy, then stock indices have no reason to grow.

By the way, these grounds could have appeared yesterday, but so far this is only a hypothesis. The fact is that yesterday a report on GDP for the first quarter was published in the States and it can be said that it shocked the markets, as it amounted to -1.4% q/q with forecasts of +1.1% q/q. Thus, GDP declined at the beginning of 2022 and formally it is a recession. Of course, this may be an isolated case, but still, if it is not an accident, then the Fed is unlikely to be able to raise the rate at the pace stated by James Bullard and other "hawks". If so, then the Fed may refuse to reduce the balance under the QT program or significantly reduce it. All this suggests that monetary policy will be tightened less aggressively than expected the day before yesterday. And this is not bad news for risky assets, in particular, stocks and cryptocurrencies.

Meanwhile, the US has adopted a law on "lend-lease" for Ukraine. Earlier, the Senate voted unanimously for it, and yesterday the House of Representatives. "For" 417 votes were cast, "against" - 10. This means that now the United States will supply Ukraine with almost any weapons, new-generation weapons, weapons that have just been produced and produced precisely at the request of Kyiv, and not what has been in warehouses for many years and is not needed by its owners. Lend-Lease is a program that provided significant assistance to the allies of the "anti-Hitler coalition" during the Second World War. Then the States even supplied warships and airplanes. Now all these weapons will arrive in Ukraine without bureaucratic delays, the need to vote for new aid every time. In addition, we are talking not only about the supply of weapons and military equipment, but the law also provides for the possibility of supplying any humanitarian aid, transport, anything that will help Ukraine stand up against Russia. I probably don't need to say that this is, of course, great news for Ukraine and bad news for Russia, but in general, it means that the military conflict will continue for a very long time, and its consequences will be very visible in Europe.