Sanctions cripple Russia as ruble plunges, rates soar. But U.S. rates are better today.
There’s a run on ATMs in Russia and their central bank raised rates from 9.5% to 20% in the wake of sanctions severely limiting Russia’s access to the global financial system. They raised rates like this to try to make deposits more attractive to depositors and stop consumers from making a run on the banks. the
Below is a CNBC update with a good summary of what’s up in the Russian economy today. But when “20% rate” headlines start floating around, it’s important to delineate those headlines from U.S. rates. Today in America, mortgage rates — which are tied to trading in mortgage bonds — are actually improved.
Why? Because bonds backed by U.S. mortgage bonds are considered a safe investment when geopolitics flare up. So U.S. mortgage bond prices rise, which causes U.S. mortgage rates to drop.
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Here's a good CNBC update of what's happening with Russia rates today as severe sanctions play out. Also, I'm adding a note about U.S. rate reactions so far.
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– Economic sanctions cripple Russian economy as ruble plunges, interest rates soar