After January’s CPI slipped to 2.4 %—its lowest since mid-2021—traders halved two-year Treasury yields to 3.42 % and priced a 50 % chance of a third Fed cut this year.(ft.com) Core inflation eased to 2.5 %, a level that historically preceded rate cuts in 1998 and 2019; yet services prices and wages are still rising 0.3–0.4 % month-on-month, warning that the final mile to the Fed’s 2 % target will be the hardest.(apnews.com)

I see three structural tensions beneath the headline relief: 1) tariff-driven goods inflation remains sticky, echoing the 1970s’ supply-side shocks; 2) shelter costs, though cooling, keep real affordability 25 % worse than five years ago; 3) political pressure for easier money clashes with a Fed scarred by its 2022 credibility loss. The result is a standoff: markets cheer, policymakers hesitate, households feel little change.

As the economist Isabella Weber notes, “Inflation is rarely a purely monetary phenomenon—it is a battlefield of conflicting interests.”* Navigating that battlefield, the Fed must now decide whether relief is victory or merely a lull.

*Isabella Weber, How China Escaped Shock Therapy (2021)

The Gist AI Editor

A New Alliance of Sovereigns

At the Munich Security Conference, US Secretary of State Marco Rubio called on Europe to join the Trump administration in forging a new global order prioritizing national sovereignty, reindustrialization, and military strength. The speech signaled a definitive pivot from post-war internationalism toward a nation-first foreign policy. From our perspective, the emphasis on sovereignty is a healthy challenge to supranational overreach. However, the call for “reindustrialization” carries a protectionist echo that could threaten the open trade frameworks essential for global prosperity.

The Authoritarian Signature

The brutal tactics of authoritarianism are on stark display. A joint European investigation now asserts that Russian dissident Alexei Navalny was killed in prison with epibatidine, a sophisticated poison derived from South American dart frogs and not found naturally in Russia. The method points directly to a state-sponsored assassination. Meanwhile, the erosion of civil society in conflict zones is accelerating. In southern Gaza, the medical charity Doctors Without Borders (MSF) suspended non-critical activities at a major hospital, citing the presence of armed men and suspected weapons transfers within the facility.

Sovereignty Stirs in North America

In Canada, the oil-rich province of Alberta is advancing a referendum on independence, a movement buoyed by encouragement from allies of President Trump. Proponents are gathering the roughly 177,000 signatures needed to trigger the vote, fueled by a desire for greater economic autonomy and freedom from federal regulations they argue stifle their energy sector. This “Wexit” (Western Exit) impulse reflects a powerful friction in modern federations: the clash between economically productive regions and central governments intent on regulating their industries and redistributing their wealth.

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

Zelenskyy insists elections can only take place two months after a ceasefire
— Financial Times

A much-needed Beveridge
— Financial Times

Medical activities halted at Gaza hospital after reports of gunmen, suspected weapons transfers
— The Straits Times

Amazon’s Andy Jassy bets on $200bn AI spending drive to revive AWS
— Financial Times

Rubio calls on Europe to join Trump’s new world order
— Politico.Eu

Canada Has a Secessionist Movement on Its Hands. Its Supporters Thank Trump.
— Wall Street Journal

Europe’s Dwindling Gas Buffer

Natural gas reserves across the EU have dropped below a key threshold, now standing at 34.82% of capacity—notably lower than the 39% recorded this time in 2025. While Italy maintains a healthier reserve at 51.83%, Europe’s industrial engine, Germany, sees its storage at a concerning 24.83%. A recent 1.5% dip in gas prices to €32.37 per terawatt-hour (TWh), a unit of energy, was driven by transient mild weather, masking a structural vulnerability (Ansa, GIE). This depletion rate questions the continent’s energy security ahead of next winter, suggesting an over-reliance on favourable short-term conditions rather than robust, market-led supply strategies.

The Rubio Doctrine

At the Munich Security Conference, U.S. Secretary of State Rubio delivered a calibrated message of conditional partnership, a sharp tonal shift from Vice President Vance’s abrasive rhetoric in 2025. While affirming transatlantic ties, the core of the speech championed a persistent “America First” foreign policy, demanding Europe shoulder a greater share of the security burden (ZDF). For European leaders, this signals the formalisation of a new, transactional relationship. The pivot forces the continent to accelerate its own defence integration and confront its strategic dependencies, moving beyond aspirational policies toward concrete, self-reliant action.

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

Rubio wirbt in München – und stellt klare Bedingungen
— ZDF

Trump reportedly considers senior US Treasury official for German ambassador
— Politico Europe

Germany news: Author Arundhati Roy quits Berlinale over Gaza
— Deutsche Welle

Nach Vulkanausbruch: Kilometerlanger Lavastrom
— ZDF

Wie schlägt sich Team D gegen Top-Favorit Kanada?
— ZDF

Le scorte di gas si assottigliano, l’Europa sotto al 35%
— Ansa