Archives for February 2022

The carve-out means that energy payments will continue to flow, mitigating risks to global energy markets and Europe, which is heavily reliant on Russian oil and gas exports. U.S. officials said that they want energy prices to remain steady and that they do not want a spike in prices to benefit Mr. Putin, however they noted that they are considering measures that would restrict Russia from acquiring technology that it needs to be an energy production leader in the long term.

The measures announced on Monday were born from lessons that the United States learned since imposing sanctions on Russia following its annexation of Crimea in 2014. A senior Biden administration official said that Mr. Putin began amassing international reserves after 2014 to blunt the impact of future sanctions and that the United States, in preparing to exert new pressure on Russia’s economy, determined during months of preparation with European allies that it would need to target Russia’s central bank directly.

“The U.S. and other Western economies have deployed a set of highly potent financial weapons against Russia with remarkable speed,” said Eswar Prasad, a Cornell University economics professor and former International Monetary Fund official. “Cutting off access to global financial markets and to a country’s war chest of international reserves held in currencies of Western economies amounts to a crippling financial blow, especially to an economy like Russia’s that relies to such a large extent on export revenues.”

The sanctions also replicate some of the economic warfare that the United States has used against Iran in recent years, which included sanctions on its central bank and blocking its financial institutions from the SWIFT financial messaging system.

On Saturday, the European Commission, Britain, Canada, France, Germany, Italy and the United States said they would remove some Russian banks from SWIFT, essentially barring them from international transactions, and impose new restrictions on Russia’s Central Bank to prevent it from using its large international reserves to sidestep sanctions.

Biden administration officials said on Monday that the full list of Russian banks that are being cut off from SWIFT is still being finalized in coordination with European countries.

Article source: https://www.nytimes.com/2022/02/28/us/politics/us-sanctions-russia-central-bank.html

“It’s a really very, very good constructive pricing environment that we’ve seen right now, probably the best in recent memory,” Richard J. Kramer, the chief executive at Goodyear, said on a Feb. 11 earnings call.

The company does look to its competitors as it makes its price increases — but they, too, are charging more.

“There are nine competitors that we tend to track, and seven out of the nine have announced price increases in the first quarter, and one of the ones who hadn’t raised prices right at the end of last year,” Darren Wells, its chief financial officer, said on the call. Goodyear saw profit margins expand last year, driven in part by price increases.

Sizing Up Beef Costs

The restaurant family that includes Outback Steakhouse, Bloomin’ Brands, is planning to raise prices about 5 percent across its brands to cover rising labor and food costs — and, by pairing that with efficiency improvements, it is managing to increase its profits.

“It became clear that the 3 percent pricing we previously discussed was not enough to offset the increased inflationary pressures our industry is facing,” said Christopher Meyer, the chief financial officer at Bloomin’ Brands, speaking of the last quarter. “Given that we had not taken a material menu price increase since 2019, we are confident that 5 percent is appropriate.”

Mr. Meyer noted that operating inflation was 4.9 percent and labor inflation was 8.9 percent in the final quarter of 2021, but that the company had managed to increase its profits through improving efficiency by simplifying its menu and by cutting food waste.

In 2022, he said, the company expects beef inflation “in the mid-to-high teens” and wage inflation “in the high single-digit range.”

Article source: https://www.nytimes.com/2022/02/27/business/economy/price-increases-inflation.html

Biden administration officials said on Saturday that there would be new restrictions by the United States and its allies against selling rubles to Russia, undercutting the country’s ability to support its currency in the face of new sanctions on its financial sector. That, in turn, could cause inflation — and while administration officials did not say so explicitly, they are clearly hoping that could fuel protests against Mr. Putin’s rule in Russia.

“We know that Russia has been taking steps since 2014 to sanctions-proof its economy, in part through the stockpiling of foreign exchange reserves,” said Emily Kilcrease, a senior fellow at the Center for a New American Security. “The central bank sanctions will limit their ability to leverage this asset, along with constraining their ability to conduct monetary policy of any sort to manage the economic damage from other sanctions.”

The United States and its allies also announced steps to put pressure on Russia’s elites, including creating a task force that the White House said would “identify, hunt down and freeze the assets of sanctioned Russian companies and oligarchs — their yachts, their mansions and any other ill-gotten gains that we can find and freeze under the law.”

The idea is to strike those who are closest to Mr. Putin and undermine their ability to live in both Russia and the West. In another new move, the United States and its allies said they would seek to limit the sale of so-called golden passports that allow wealthy Russians who are connected to the Russian government to become citizens of Western nations and gain access to their financial systems.

While the steps are some of the harshest taken yet, the announcement falls short of a blanket cutoff of Russia from SWIFT, which some officials see as a nuclear option of sorts. Such a move would have essentially severed Russia from much of the global financial system.

And some experts say that it may only drive Russia to expand the alternative to the SWIFT system that it created several years ago when it began trying to “sanction-proof” its economy. But Russia’s equivalent system is primarily domestic; making it a competitor to SWIFT, officials say, would require teaming up with China.

The moves on Saturday came on the same day that Germany’s chancellor, Olaf Scholz, announced that his government was approving a transfer of antitank weapons to the Ukrainian military, ending his insistence on providing only nonlethal aid, such as helmets.

Article source: https://www.nytimes.com/2022/02/26/us/politics/eu-us-swift-russia.html