US-Russia talks don’t signal near-term end to the war

The decision by the US and Russia to “lay the groundwork” to end the war in Ukraine marks a potentially significant turning point after three years of conflict. Negotiations will take time and the macroeconomic implications will depend on the features of any agreement. We think a peace deal could result in higher Russian natural gas flows and lower energy prices, but any boost to Europe’s economy – outside Russia and Ukraine – is likely to be limited.