Gold vaulted past $4,600 an ounce while the dollar index slid to 99.0 after U.S. prosecutors served grand-jury subpoenas on Fed Chair Jerome Powell—an act his three predecessors denounced as an “unprecedented” assault on central-bank independence. Futures on the S&P 500 fell 0.6 percent and the VIX spiked, signalling investors’ flight to safety.(reuters.com)

History shows that political capture of monetary policy fuels instability: think Nixon’s pressure on Arthur Burns in the early 1970s, which preceded the Great Inflation, or Turkey’s 2021 lira collapse after Erdoğan sacked three governors in two years. If the world’s reserve-currency issuer drifts down that path, global pricing of risk—already jittery over Iran and Venezuela—could face a regime shift, with higher term premiums and a premium on tangible stores of value.(dw.com)

As Ben Bernanke warned, “undermining an independent Fed risks trading short-term political gain for long-term economic pain.” Reuters The question now is whether Congress and markets will enforce the guardrails that anchor the dollar system—or discover, too late, that the anchor has been cut.

— The Gist AI Editor

Market Jitters Over Fed’s Future

Markets are reacting with notable anxiety to a criminal investigation into U.S. Federal Reserve Chair Jay Powell, a move that strikes at the core of central bank independence. The probe has triggered a flight to safety, with gold hitting a new record high as investors seek a reliable store of value amidst the uncertainty (FT). Concurrently, the U.S. dollar has weakened, and government bonds have seen a sell-off, indicating fears that political pressure could compromise the Fed’s primary mandate of controlling inflation (WSJ). Long-term inflation expectations, a key metric of market confidence, are already ticking upward (FT). Our view: any erosion of central bank autonomy is a significant threat to stable, predictable monetary policy, the bedrock of a sound market economy.

Geopolitical Squeezes on Energy

Sweden is advocating for a significant tightening of sanctions against Russia, urging the EU to ban all support for Moscow’s oil and gas shipping fleets and to sanction its fertilizer exports (The Straits Times). This move aims to cripple the Kremlin’s revenue streams by targeting the logistics that underpin its energy trade. Meanwhile, in Latin America, Bolivia’s government is holding firm on its decision to eliminate fuel subsidies, despite widespread protests (Bloomberg). President Rodrigo Paz confirmed a new economic decree is being prepared, but the subsidy cuts—a painful but necessary step away from market distortion—will remain. This reflects a broader, often contentious global trend toward aligning domestic energy prices with international market realities.

Industrial & Resource Headwinds

In the aviation sector, European manufacturing giant Airbus announced it delivered 793 commercial aircraft last year, meeting its revised corporate targets and signaling resilience in a complex global supply chain environment (WSJ). Further south, Aclara Resources is optimistic about fast-tracking a new rare-earth mining project in Chile, a development that could bolster Western supply chains for critical minerals essential to high-tech manufacturing (Bloomberg). Such efforts highlight the ongoing strategic competition to secure resources vital for everything from electric vehicles to defense systems, reducing reliance on single-source suppliers.

Stay tuned for the next Gist—your edge in a shifting world.

Bolivia Plans New Economic Decree, Won’t Resume Fuel Subsidies
— Bloomberg

Latest Threat to Fed Chair Powell Rattles Markets
— Wall Street Journal

UnitedHealth Used Aggressive Tactics to Boost Medicare Payments, Senate Report Finds
— Wall Street Journal

Airbus Hits Revised Plane Delivery Target
— Wall Street Journal

Aclara Sees Prospect of Fast-Tracking Rare Earth Project With Chile’s Next President
— Bloomberg

Sweden urges EU ban on support to Russian oil, gas-shipping fleet
— The Straits Times

Germany’s Health Inefficiency

A new study reveals the lethal cost of labour market distortions in Germany’s healthcare sector. The migration of nurses to neighbouring Switzerland has directly caused a 4.4% rise in mortality rates in border-region hospitals, primarily impacting the elderly and emergency cases (ZEW, ifo Institute). This stark figure exposes the consequences of a system unable to retain critical talent. Compounding this is a profound failure in public-sector innovation; after years of political promises, fewer than 4% of publicly insured Germans use the electronic patient record (ePA), a critical tool for efficiency (ZDF). The state’s inability to manage either its workforce or its technology is a grim indicator of systemic sclerosis.

UK’s Defence Funding Gap

The UK’s military leadership has publicly confirmed that national defence programs are facing cuts and delays, directly undermining the Starmer government’s pledge to re-arm Britain (Politico). The Chief of the Defence Staff, Richard Knighton, acknowledged that the country’s military ambitions exceed its budget. This is a classic case of political rhetoric colliding with fiscal reality. Announcing greater security commitments without a credible funding mechanism is fiscally irresponsible and signals a strategic vulnerability to adversaries, who measure capability, not promises. The gap between ambition and allocation suggests a difficult realignment ahead for the UK’s global posture.

European Energy Volatility

Europe’s energy markets are flashing warning signs as winter bites. Natural gas futures on the Dutch TTF hub, a key European benchmark, surged 6.6% to close at €30.25 per megawatt-hour (Ansa). The spike is driven by falling temperatures and geopolitical jitters over potential supply disruptions from the Iran-Turkey pipeline. This sharp price movement underscores the continent’s continued exposure to external energy shocks, a vulnerability that market liberalisation has mitigated but not eliminated. While equity markets remained largely stable—Milan’s FTSE Mib index closed up a marginal 0.03%—the energy price action is a reminder of where Europe’s economic sensitivities lie (Ansa).

Catch the next Gist for the continent’s moving pieces.

Wildberger: “Mehr Vertrauen” in elektronische Patientenakte
— ZDF

UK defense facing cuts despite spending boost, says army chief
— Politico Europe

ZEW-ifo-Studie: Pflegekräftemangel erhöht Sterblichkeit
— IFO

Real Madrid trennt sich von Trainer Alonso
— ZDF

Wildes Wetter und warme Worte
— ZDF

Borsa: Milano chiude stabile . Balza Fincantieri, pesa Stellantis
— Ansa