The Day at a Glance | February 23 2022

The Top

*U.S. sanctions Russia with bank restrictions and broadening limitations on trading of Russian government debt in Western markets.

*U.S. consumer confidence reached its lowest level in 5 months (110.5); inflation increases concerns.

*Vladimir Putin assures that he is still open to diplomatic solutions as long as Russia`s security interests are respected.

*The White House announced that clogged ports will be given access to $450 million dollars to alleviate congestion and facilitate the movement of goods.

*Markets delay expectations of interest rate increases in Europe until December of 2022.

*U.S. economy improved during February (Composite PMI 56) after slowing down in January due to the Omicron variant; prices remain high.

Economic environment

Sanctions on Russia. The United States and its allies announced a new round of sanctions on Russia as a response to its military advances in the Eastern Ukraine region. U.S. sanctions seek to limit the funding capacity of two Russian banks, the VEB (state development bank) and the Promsvyazbank (military bank). Additionally, sanctions seek to prevent investors in U.S. and European markets from purchasing new Russian sovereign debt issues. Officials close to the Kremlin were also subject to sanctions: Petr Fradkov (Promsvyazbank CEO), Sergei Kiriyenko (Promsvyazbank) and Aleksandr Bortnikov (director of the Federal Security Service of the Russian Federation and part of Putin`s close circle). Sanctions were perceived as moderate as more decisive actions were expected, such as completely isolating Russia`s banking system from the rest of the global economy or direct sanctions on Putin; especially, because Biden considered that Russia`s invasion of Ukraine started with recognizing the Luhansk and Donetsk separatist groups and sending troops to these regions. The European Union and the United Kingdom echoed U.S. sanctions and limited bank activities and the Russian government`s access to Western financial markets. Putin has assured that he remains open to diplomatic solutions as long as Russia`s security is respected and plans for NATO to keep expanding in Eastern Europe come to a halt. China has condemned these sanctions and accused the U.S. of increasing tensions in Ukraine while attempting to expand NATO`s presence.