So, beyond confirming a lot of U.S. intelligence warnings, what are the takeaways from Monday’s developments? They are both obvious and grim.

1) This is only the beginning. Recognizing the two republics and signing friendship treaties with them gives Russia a legal pretext to deploy troops to the Donbas. Maybe they then provoke the Ukrainians by trying to take all the territory claimed by those republics. But it seems unlikely that the military escalation will stop there. As Michael Kofman tweeted, “Russia doesn’t need 190k troops on Ukraine’s borders to recognize the independence of separatist republics. These troops are not even near the Donbas. This is the first step in what will likely be a large-scale Russian [military] operation to impose regime change.”

2) The economic ramifications will be considerable. It’s easy to point out that Russia’s economy is not terribly large compared to the United States, European Union, China, India or any other great power. But that is a deceptive way of looking at how sanctioning Russia would affect the global economy. The global economy is already facing an array of stressors, including the coronavirus pandemic, inflation and supply chain problems. Neither Russia nor Ukraine is a large market, but each country is a key supplier of a variety of goods including natural gas, wheat and palladium. As Patricia Cohen and Jack Ewing of the New York Times note, “isolated shortages and price surges — whether of gas, wheat, aluminum or nickel — can snowball in a world still struggling to recover from the pandemic.”