What should I do about my wife, who has decided to boycott her sister in solidarity with her brother due to a financial dispute over contracting work? And is she right in doing so?

If a wife cuts off her husband's sister merely out of zeal, and not for a legitimate Shariah interest, then it is not permissible for her to cut her off for more than three days, due to the Shariah's prohibition of abandonment for more than three days, as in the hadith (definition): "It is not lawful for a Muslim to abandon his brother for more than three days," and the hadith: "Deeds are presented every Monday and Thursday. On these days, Allah, the Almighty and Majestic, forgives every person who does not associate anything with Allah, except for a man who has animosity between him and his brother. It is said: 'Leave these two until they reconcile.'" According to the majority of scholars, abandonment ceases merely by greeting and returning the greeting.