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Not even Fed chair Jay Powell can be accused of ever moving that far this fast. 

In an emergency meeting on Tuesday, Russia's central bank governing board
decided to increase interest rates by 3.5 percentage points, reaching 12%. This
action aims to prop up the ruble, which has been significantly impacted by
Western sanctions in response to the conflict in Ukraine.

“This decision is aimed at limiting price stability risk,” it said in a
statement, justifying its second hike in less than a month by citing
“substantial” upside risks to inflation from the collapsing currency.

Just four days prior, a deputy governor had dismissed concerns around the
exchange rate in comments to the state news agency TASS. 

The move comes after the country’s ruble broke below the psychological floor of
100 to a U.S. dollar, rendering each less valuable than a penny. 

The currency has now surrendered all of its gains from last year to plumb depths
not seen since an investor panic in the early days of the war. 

Pressure on the bank subsequently rose to a fever pitch, with Kremlin mouthpiece
and Putin ally Vladimir Solovyov demanding on his Russian state TV show that the
central bank takes action. 




Prior to the February 2022 invasion of Ukraine, Putin’s industry had long been
dependent on the West. In exchange for selling commodities like food, energy and
base metals such as nickel, Russia could purchase the machinery and equipment it
needed to run its factories.



Western sanctions however have crippled manufacturers’ ability to provide for
their consumers by limiting access to key intermediates including microchips
that could help them expand their output.

In its statement on Tuesday, the bank blamed consumers forced to increasingly
look abroad in order to satisfy their demand for finished goods.

This exerted heavy downward pressure on the ruble and threatened the central
bank's price stability target of 4% as imported inflation is now spilling over
into the broader economy.

Raising the main policy rate to 12% from a previous 8.5% so soon after a July
hike is a tacit admission that the bank’s most recent 100 basis point move less
than four weeks ago was far from sufficient to put a floor under the ruble. 

Even when Fed chair Powell was in full-blown inflation-fighting mode, he only
hiked at a pace of 75 bp during four consecutive meetings stretching across a
six-month timeframe.

This story was originally featured on Fortune.com

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Economic analyst Steven Rattner on Monday shared a pie chart showing that all
but 1% of the $3 billion in investments in former President Donald Trump's
son-in-law Jared Kushner's private equity firm Affinity Partners came from
foreign sources after he "spent much of his White House tenure cozying up" to
Saudi Arabia and Crown Prince Mohamed bin Salman. The Saudis invested $2 billion
in Kushner's fund while the United Arab Emirates and Qatar each added another
$200 million. About $625 million came from other non-U.S. sources while only $31
million came from sources inside the U.S. Rattner told MSNBC that he's "never
seen this" in 40 years in the business.




"I've never seen somebody get two-thirds of their money from a single investor.
Usually a single investor might be a few percent of the fund, might be 5
percent, occasionally 10 percent," he said. While Kushner has hired some people
for his fund, "I've seen nothing else about what he's actually done with the
money," Rattner continued.



"It is normal to invest this money over a period of several years, so I don't
think we can draw a firm conclusion yet. But, again, we're going back to a guy
who's a real estate guy, and frankly, not a particularly good one at that, who's
suddenly got $3 billion trying to do private equity deals competing against
people who've been in this business for a long time. And I wouldn't, if I were
the Saudis, count on making a lot of money from this any time soon," he said,
adding: "U.S. private equity firms still raise the vast bulk of their money from
U.S. investors. This is extraordinary — unprecedented — I've never seen anything
like it."






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