Combined with the sanctions announced Thursday, Mr. Biden said, these measures “will so weaken” Russia that it will give Mr. Putin “some difficult decisions.”

Mr. Putin has been pushing for more than a decade for Western recognition “of a Russian sphere of influence in the post-Soviet states,” and he may not stop unless he is forced to do so, Ms. Stent said in an online Council on Foreign Affairs conference on Wednesday.

In anticipation of the new sanctions, bank stocks fell faster than the markets overall. Shares of European banks with the biggest Russian operations plunged: Raiffeisen of Austria fell 23 percent, while UniCredit of Italy fell 13.5 percent and Société Générale of France lost about 12 percent. In the United States, JPMorgan Chase fell about 2.8 percent and Citigroup slid 4 percent.

Energy stocks fell on Thursday but they have been a bright spot for investors who have owned them in 2022. With a gain of more than 19 percent, energy is the only sector in the SP 500 to be up for the year. Halliburton, Occidental Petroleum, Marathon Oil, Hess and Exxon Mobil are among the fossil fuel stocks that have gained more than 20 percent in 2022.

Investors seeking safety in the market storm flocked to the usual havens — Treasury bonds and gold.

“Treasuries provide protection in an environment like this,” said David Rosenberg, chief economist of his own firm, Rosenberg Research, in Toronto. “I think recession risks are rising, and there has never been a recession in modern history where long-term Treasuries didn’t make you money.”

Bond yields, which move in the opposite direction of prices, fell. The yield on the benchmark 10-year Treasury, which was as high as 2.045 percent on Feb. 15, fell to 1.96 percent on Thursday.

And gold, which was less than $1,770 an ounce in November, rose above $1,924 at one point in New York, before falling to $1,899. “Gold has always been one of the places you want to go in a crisis,” Mr. Rosenberg said.

Reporting was contributed by Anton Troianovski, Austin Ramzy, William P. Davis and Jason Karaian.

Article source: https://www.nytimes.com/2022/02/24/business/economy/stock-market-today.html

In America, the Fed has sometimes reacted to global problems by cutting borrowing costs, making money cheaper and easier to obtain, rather than by lifting interest rates and making credit conditions tighter. But economists said this time was likely to be different.

“The current situation is different from past episodes when geopolitical events led the Fed to delay tightening or ease because inflation risk has created a stronger and more urgent reason for the Fed to tighten today,” researchers at Goldman Sachs wrote in an analysis note.

Plus, with wages rising and consumers increasingly expecting high inflation in the coming years, the fact that the conflict has the potential to further elevate prices could strike the central bank as problematic.

“Further increases in commodity prices might be more worrisome than usual,” they wrote.

Some economists warned that the Russian invasion in some ways echoed the inflationary episode of the 1970s: Back then, price increases were already rapid, and a sharp oil price increase pushed inflation up further and made it stick around. The Arab oil embargo of 1973-74 and the Iranian revolution of 1979 both contributed to an oil supply shortage.

“There is something eerily reminiscent of the 1970s and the surge in energy prices associated with Russia’s invasion of the Ukraine,” Diane Swonk, chief economist at Grant Thornton, wrote on Twitter Thursday. “It couldn’t happen at a worse time as it is pouring fuel over an already kindled fire of inflation.”

Economists have released varying estimates of how much an oil price shock could bolster inflation in the coming months.

If oil increases to $120 per barrel by the end of February, past the $95 mark it hovered around last week, inflation as measured by the Consumer Price Index could climb close to 9 percent in the next couple of months, instead of a projected peak of a little below 8 percent, said Alan Detmeister, an economist at UBS who formerly led the prices and wages section at the Fed.

Article source: https://www.nytimes.com/2022/02/24/business/economy/interest-rates-russia-ukraine.html

Administration officials have studied how sanctions would affect each of the big banks, including Sberbank and VTB, Russia’s two largest banks. Sberbank has about a third of the assets in the country’s banking sector, and VTB has more than 15 percent. Some experts are skeptical that the administration would put those two banks on the S.D.N. list for fear of the consequences for the Russian and global economies. For now, U.S. officials are not ready to cut off all Russian banks from Swift, the important Belgian money transfer system used by more than 11,000 financial institutions worldwide.

The Treasury Department has other sanctions lists that would impose costs while inflicting less widespread suffering. For example, it could put a bank on a list that prevents it from doing any transactions involving dollars. Many international commercial transactions are done in U.S. dollars, the currency that underpins the global economy.

The Treasury Department is also expected to put more Russian officials, businesspeople and companies on the sanctions lists.

By Thursday afternoon in Russia, the nation’s stock market had fallen nearly 40 percent.

The Commerce Department has been making plans to restrict the export of certain American technologies to Russia, a tactic that the Trump administration used to hobble Huawei, the Chinese telecommunications company. The controls would damage the supply chain for some Russian sectors. U.S. officials said their targets included the defense industry and the oil and gas industry.

European officials are expected to announce sanctions similar to many of the ones planned by the United States, as they did this week. However, they have been more wary of imposing the harshest sanctions because of the continent’s robust trade with Russia.

Although Mr. Biden has said he will contemplate any possible sanctions, U.S. officials for now do not plan big disruptions to Russia’s energy exports, which are the pillar of the country’s economy. Europe relies on the products, and surging oil prices worldwide would cause greater inflation and more problems for politicians. However, Germany announces this week that it would not certify Nord Stream 2, a new natural gas pipeline that connects Russia and Western Europe. On Wednesday Mr. Biden announced sanctions on a subsidiary of Gazprom, the large Russian energy company, which built the pipeline and had planned to operate it.

“We have been frank, we have been candid with the American people that our measures — the measures we have and are prepared to impose on the Russian Federation — certainly won’t be cost-free for the Russian Federation,” Ned Price, the State Department spokesman, said on Wednesday. “But they won’t be entirely cost-free for the rest of the world as well.”

Article source: https://www.nytimes.com/2022/02/24/us/politics/ukraine-russia-whats-next.html

Russia and Ukraine together are responsible for nearly 30 percent of global wheat exports, while Ukraine alone accounts for more than 15 percent of global corn exports, he said. And many of Ukraine’s growing regions for wheat and corn are near the Russian border.

The rising price of gas and fertilizer, as well as droughts and adverse weather in some regions, like the Dakotas, had already helped to push up the global price of wheat and other commodities. Ukraine is also a significant producer of barley and vegetable oil, which goes into many packaged foods.

“Production might be interrupted, and shipping may be affected as well,” Mr. Bogmans said. If other countries impose sanctions on Russian food items, that could further limit global supplies and inflate prices, he said.

But because food costs make up a small portion of inflation, that may not matter as much to overall price data, Mr. Detmeister at UBS said. It is also hard to guess exactly how import prices would shape up because of the potential for currency movements.

If the conflict drives global uncertainty and causes investors to pour money into dollars, pushing up the value of the currency, it could make United States imports cheaper.

Other trade risks loom. Unrest at the nexus of Europe and Asia could pose a risk for supply chains that have been roiled by the pandemic.

Phil Levy, the chief economist at Flexport, said that Russia and Ukraine were far less linked into global supply chains than China, but that conflict in the area could disrupt flights from Asia to Europe. That could pose a challenge for industries that move products by air, like electronics, fast fashion and even automakers, he said at an event at the National Press Foundation on Feb. 9.

Article source: https://www.nytimes.com/2022/02/23/business/economy/russia-ukraine-global-us-economy.html

Internally, he said, he argued that the looming migration of hundreds of millions of people because of climate change could lead to xenophobia, right-wing populism and increasing authoritarianism and that climate was therefore a top priority for the labor movement.

“Our movement will never grow under authoritarianism,” he said, adding, “Everyone shook their head, but there was no action.”

Mr. Gebre, who was born in Ethiopia, came to the United States as a teenager after escaping to a refugee camp in Sudan in 1983. He rose to become the executive director of the Orange County Labor Federation in California, and has been executive vice president of the A.F.L.-C.I.O. since 2013.

As a top A.F.L.-C.I.O. official, he often clashed with members of the inner circle of Richard Trumka, the longtime president, who died in August. Mr. Gebre said he believed that the federation focused too much on electoral and legislative politics and not enough on movement-building and organizing, and that the labor movement was underinvesting in key industries like technology.

Officials including Liz Shuler, the current president, have said that the choice between organizing versus political objectives like passing pro-labor legislation is a false one, and that the federation needs to succeed at both.

“We are incredibly grateful for Tefere’s service and leadership as executive vice president,” Ms. Shuler said in a statement. “He understands that worker rights and climate justice can only be achieved together, and we will work closely with him in his new role.”

Article source: https://www.nytimes.com/2022/02/24/business/economy/tefere-gebre-labor-greenpeace.html

Kevin Wolf, a partner in international trade at Akin Gump who worked in export controls under the Obama administration, said the White House could tailor its use of export controls to target certain strategic sectors, for example companies in the aerospace or maritime industry, while bypassing products used by the Russian populace, like washing machines.

“They’re making it clear they’re not trying to take action that harms ordinary Russians,” Mr. Wolf said.

Andy Shoyer, co-lead of global arbitration, trade and advocacy for Sidley Austin, said the restrictions appeared likely to focus on semiconductors and semiconductor equipment. The novel export controls that the United States wielded against Huawei have a powerful reach when it comes to semiconductors, since even chips made abroad are mostly manufactured and tested using machinery based on American designs, he said.

“It’s not just what’s physically exported from the U.S.,” Mr. Shoyer said. “It could encompass a substantial amount of production, because so much of the semiconductor industry relies on U.S. technology.”

The global semiconductor industry, which has been roiled by shortages and supply chain disruptions throughout the pandemic, could face more disruptions given Ukraine’s role in the semiconductor supply chain.

Stacy Rasgon, a senior analyst at Bernstein Research, said Ukraine was an important location for the purification of neon, a gas used in the production of semiconductors. While neon costs were just a tiny fraction of what semiconductor companies pay, “potentially putting a significant fraction of purification capacity at risk sounds somewhat ominous for an industry already struggling with shortages,” he said.

A spokesman for the Semiconductor Industry Association said the group was still evaluating potential impacts related to Russia’s and Ukraine’s roles as materials suppliers. But he said Russia was not a significant direct consumer of semiconductors, accounting for less than 0.1 percent of global chip purchases, according to the World Semiconductor Trade Statistics organization.

Article source: https://www.nytimes.com/2022/02/23/business/economy/export-controls-russia-us.html

Certainly, the path of energy transition has never been clear. Five climate summits have taken place over the past 30 years, and progress has always fallen short. This latest setback may just be the latest in a long series of halfway measures and setbacks.

Still, without a more comprehensive strategy to wean itself off gas, Europe won’t be able to accomplish its goal of reducing emissions 55 percent by 2030 compared with 1990 levels, or to reach the Glasgow summit’s target of cutting net greenhouse gases to zero by 2050.

As Mr. Nixey acknowledged, “this debate is changing” as leaders are forced to acknowledge the downsides of dependency on Russian energy.

Even in Germany, where the progressive Greens have gained a more influential voice in the government, there has been a shift in tone.

This month, Robert Habeck, Germany’s new minister for the economy and climate change and a member of the Greens, said events had underscored the need to diversify supplies. “We need to act here and secure ourselves better,” he said. “If we don’t, we will become a pawn in the game.”

Energy prices started to climb before Mr. Putin began massing troops on Ukraine’s eastern border, as countries emerged from pandemic closures and demand shot up.

But as Mr. Putin moved aggressively against Ukraine and energy prices soared further, the political and strategic vulnerabilities presented by Russia’s control of so much of Europe’s supply took center stage.

Article source: https://www.nytimes.com/2022/02/23/business/economy/russia-ukraine-energy-security-climate-change.html

Financial markets around the world wobbled on Tuesday in the wake of the Russian actions and the response from Western governments. In the United States, the news pushed stocks lower, leaving the SP 500 in correction territory, more than 10 percent below its January peak. Oil prices, which had risen to nearly $100 a barrel in anticipation of a global disruption, settled at $96.84 a barrel, up 1.5 percent.

Mr. Biden and his counterparts in Germany, England and other European nations described the package of global sanctions as severe. They include financial directives by the United States to deny Russia the ability to borrow money in Western markets and to block financial transactions by two banks and the families of three wealthy Russian elites.

Chancellor Olaf Scholz of Germany put the Nord Stream 2 gas pipeline on hold. The $11 billion conduit from Russia to Germany — completed but not yet operational — is crucial to Moscow’s plans to increase energy sales to Europe. European Union foreign ministers and the British government approved sanctions against legislators in Moscow who voted to authorize the use of force, as well as Russian elites, companies and organizations.

“It will hurt a lot,” said the E.U. foreign policy chief, Josep Borrell Fontelles.

The governments of Japan, Taiwan and Singapore also issued a joint statement saying they would limit technology exports to Russia in an effort to pressure Mr. Putin with damaging restrictions on his ambitions to compete in high-tech industries.

But the moves in Washington and other capitals around the world were limited in scope and fell short of the more sweeping economic warfare that some — including members of Congress and other supporters of Ukraine — have repeatedly demanded in recent weeks.

Mr. Biden and his counterparts have said they must balance the need to take swift and severe action with preserving the possibility of even greater sanctions on Russia if Mr. Putin escalates the conflict by trying to seize more territory claimed by the separatists, or even the entire country — a war that could kill tens of thousands of people.

“This is the beginning of a Russian invasion of Ukraine,” he said, adding that “we’ll continue to escalate sanctions if Russia escalates.”

Article source: https://www.nytimes.com/2022/02/22/us/politics/us-russia-ukraine-sanctions.html

Some experts say that if the Biden administration follows through on the most severe options that officials have suggested are possible — most notably severing the country’s top banks, including Sberbank and VTB, from transactions with non-Russian entities — Russia could suffer a financial panic that triggers a stock market crash and rapid inflation. The effects would most likely strike not only billionaire oligarchs but also middle-class and lower-income families. Russian enterprises would also be unable to receive payment for energy exports.

Besides isolating Russian state-owned banks, the escalatory sanctions that U.S. officials have prepared would also cut off the ability to purchase critical technologies from American companies.

If the United States imposes the harshest penalties, “there will be unexpected and unpredictable consequences for global markets,” said Maria Snegovaya, a visiting scholar at George Washington University who co-wrote an Atlantic Council paper on U.S. sanctions on Russia.

Edward Fishman, a top State Department sanctions official in the Obama administration, called Mr. Biden’s action on Tuesday a modest first step intended as “a shot across the bow.”

Mr. Fishman said the administration’s move against one of the two targeted banks — VEB, the country’s main development bank — was the first time the United States had fully cut off a state-owned Russian financial institution. “I interpret that as a warning that the Biden administration is prepared to cut off other major Russian banks from the U.S. financial system,” Mr. Fishman said.

“Biden is giving Putin an opportunity to step away from the brink,” he added. “But he’s also signaling that, if Putin unleashes a full-scale war, the economic costs will be immense.”

Article source: https://www.nytimes.com/2022/02/22/us/politics/russia-biden-sanctions-ukraine.html

Ms. Bowman noted that the U.S. has minor banking, financial, and trade interests with Russia, and that “we don’t believe that would have a significant impact” on the economy given the small size of those relationships.

“But we do recognize that there are significant opportunities for potential impacts on the energy markets, as we’re moving forward, if things were to deteriorate,” Ms. Bowman added. “Obviously we’ll continue to watch that, and if we believe that might have some influence on the global economy, we’ll take that into account as we’re going into our meetings and discussing the economy more broadly.”

High fuel prices could weigh on consumer spending on other goods and services as families devote more of their monthly budgets to energy. If the potential for war makes consumers uncertain about the future or sends stock prices plummeting, it also could weigh on demand as nervous shoppers retrench.

Central bankers noted in minutes of their most recent meeting that geopolitical risks “could cause increases in global energy prices or exacerbate global supply shortages,” but also that they were a risk to the outlook for growth.

But officials have painted it as more of one risk among many than as a pivotal point of concern.

“We actually have seen fighting in this area of the world in the past,” James Bullard, the president of the Federal Reserve Bank of St. Louis, said on CNBC last week. “I do think it’s quite an important foreign policy issue, but I’m not seeing it as a leading macroeconomic issue, at least at this point.”

Article source: https://www.nytimes.com/2022/02/22/business/economy/ukraine-russia-inflation-fed.html