How will sanctions on Russia affect markets?

Western governments have imposed unprecedented economic sanctions on Russia for its invasion of Ukraine. Central bank reserves have been frozen. Banks have been cut out of the SWIFT payment network. And Russian stocks have been shorn from equity indices.

We look at what impact these moves will have on markets and how investors might respond. Is inflation going to keep rising? Might there be hidden systemic risks lurking? And might markets fall further?

In the Dumb Question of the Week, we ask why central banks target an inflation rate of 2%?

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