The war in Ukraine and the Israel-Hamas conflict will continue to have profound implications for global policy and geopolitics. They will demand significant policy bandwidth from major powers, most notably the US. In addition, they will further strain fiscal positions in the US and Europe (both directly and indirectly) at a time when fiscal and debt dynamics are increasingly constrained.

Recent conflicts are reinforcing the pre-existing trend of global fragmentation. As much of the developing world aligns itself against Israel and the US in the current conflict, this may weaken US efforts to increase its global influence, while strengthening the China-Russia axis.