What's going on?

The euro dropped to its lowest in 20 years against the US dollar on Monday, after Russia shut off the gas.

What does this mean?

Russia�s been slimming the Nord Stream�s capacity in recent months, and it went a step further on Friday: the country announced that a �technical fault� will keep the key gas pipeline between Russia and Europe shut indefinitely. Suspect timing, cynics say, as the shut-off came only hours after the G7 confirmed price caps on exported Russian oil.

Those extremely well-founded conspiracy theories�aside, the shutdown sent European gas prices up over 30% on Monday, worsening an energy crisis that�s already hampering the region�s economy. Some economists even think the European Central Bank (ECB) might opt for lower-than-expected rate hikes in a desperate bid to limit the damage. Layer on the ever-mounting risk of a recession, and that might be why the euro dropped to below $0.99 for the first time since 2002.

Why should I care?

The bigger picture: The Fed has it easy.
The ECB, in fairness, probably has a tougher job than the Federal Reserve (the Fed): inflation�s sitting at a similar rate in the US, sure, but Europe�s is more driven by a short supply of things like energy while high demand plays a relatively bigger part in America’s. That means the Fed can count on interest rate rises � which typically dent demand � more than the ECB can. Not to mention the Fed doesn�t have the impossible task of setting one interest rate across different economies with very different needs.

Zooming out: Lightning fast.
Europe was quick to roll out support after the shutdown: Germany unveiled a consumer relief plan worth $65 billion, while Finland and Sweden introduced new funding to bolster struggling utility companies. That won�t be the end of it either, since the European Commission�s set to meet at the end of this week to discuss more special energy cost-cutting measures.