Swift action 💸
  Tonight: More fear and loathing from the Wall Street crowd. Plus: No surprise here, but rent is too dang high. Let's get into it. 🇷🇺 THE RUSSIA FACTOR  This week's downright wacky stock market swings are essentially an expression of anxiety over what two big, powerful institutions – the Fed and the Kremlin – will do next.
On Wednesday, we got some clarity from the Federal Reserve. The central bank is keeping rates near zero for now, but will begin raising them in mid-March. Stocks, which were up in anticipation of the announcement, fell after Jerome Powell — yes, the Silver Fox of the Fed, aka Hair Force One, aka Fed Savage — said the central bank could act sooner and faster to tame inflation than Wall Street had been expecting.
Far more murky and still unresolved: What the heck is going on in Vladimir Putin's mind.
Here's the deal: Three decades after the fall of the Soviet Union, Russia is threatening an invasion of Ukraine. The US and its NATO allies are trying to prevent that from happening without a war breaking out.
A number of economic sanctions and other deterrents are on the table. But there's one particularly powerful deterrent under consideration — some call it the "nuclear option" — that's particularly worrisome for the Kremlin: cutting Russia off from the global banking system.
HOW IT WOULD WORK US lawmakers have suggested in recent weeks that Russia could be removed from SWIFT, a security network that connect thousands of financial institutions around the world, my colleague Charles Riley reports.
For the uninitiated, SWIFT (which stands for the rather extravagantly named Society for Worldwide Interbank Financial Telecommunication) is basically the central plumbing for global finance. Without it, Russian banks can't send or receive money across borders — and that could have devastating effects on its economy.
Of course, Russia wouldn't take kindly to such a move. It would almost certainly cut off all shipments of oil, gas and metals to Europe.
"The cutoff would terminate all international transactions, trigger currency volatility, and cause massive capital outflows," Maria Shagina, a visiting fellow at the Finnish Institute of International Affairs, wrote in a paper on the subject last year for Carnegie Moscow Center.
Russia wouldn't be the first to get the boot from SWIFT. When the network removed Iranian banks in 2012, Iran lost almost half of its oil export revenue and 30% of foreign trade following the disconnection.
THE LATEST There's a fragile diplomatic process under way. On Wednesday, The United States delivered a written response to Moscow on key security concerns, setting out what the State Department called a "sets out a serious diplomatic path forward should Russia choose it."
The SWIFT option, while drastic, isn't off the table. British Prime Minister Boris Johnson on Tuesday said he was discussing the so-called nuclear option with the United States.
"There is no doubt that that would be a very potent weapon. I'm afraid it can only really be deployed with the assistance of the United States, though."
It's not clear how much support there would be for such a move. The United States and Germany have the most to lose if Russia is disconnected, because their banks are the most frequent SWIFT users to communicate with Russian banks, according to Shagina. #️⃣ NUMBER OF THE DAY $1,651 In today's edition of "Oh My God That's So Expensive:" Rent!
The cost of rent, on average, was 10% higher in 2021 than in 2020, growing five times faster last year than it did in the first year of the pandemic, according to Realtor.com. The national median rent for a one-bedroom in December was $1,651, up more than 19% over the year before.
💸 KEEP CALM, TRADE ON  This week's market selloff may feel like a shock. But many economists and analysts say the shocking thing is that it didn't happen sooner.
Historically, corrections are viewed as healthy: A 10% fall is just market taking a breather and reassessing valuations that had gotten out of hand. But after two years without one, the drop has been jarring, especially if you peeked at your 401(k) in the past few weeks.
But veteran market watchers see the January selloff as something of a relief.
"So far, I view this as therapeutic," said Mark Zandi, chief economist at Moody's Analytics.
Of course, corrections are healthy within reason — that is, as long as they don't spiral into panic. For now, the S&P 500 is nowhere near the 20% threshold that would be considered a bear market.
THE PESSIMIST'S TAKE
Not all economists share Zandi's optimism. Jeremy Grantham, co-founder and chief investment strategist of Grantham, Mayo, & van Otterloo believes stocks are in a "superbubble" that, like most bubbles, won't end well. Many investors don't want to believe that the stock market is overdue for a broader pullback, because, well, it's a bummer.
"In a bubble, no one wants to hear the bear case. It is the worst kind of party-pooping," Grantham wrote. "For bubbles, especially superbubbles where we are now, are often the most exhilarating financial experiences of a lifetime."
THE TAKEAWAY We could be at the beginning of a bear market — only time will tell.
But if you're considering a panic sale, keep this in mind: If you had sold an S&P 500 index-traded fund during the last bear market in March 2020, you would have missed out on a 100% gain. Yes, stocks have doubled since then.
WHAT ELSE IS GOING ON? 🔌 Tesla just posted a record profit of $2.9 billion — more than triple its earnings from the same period last year.
📈 Kraft Heinz is raising prices on dozens of products, including Oscar Mayer cold cuts, Velveeta cheese and Kool-Aid. There goes my weekend...
✈️ Boeing took nearly $4 billion in charges related to problems it had with its 787 Dreamliner, causing losses to soar for the third straight year.
💰 The Bill and Melinda Gates Foundation named four new members to its board of trustees on Wednesday, marking the first outsiders added to the charity's board in its two-decade history. POST OF THE DAY
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