Donald Trump’s attempt to summarily sack Fed governor Lisa Cook tears at the legal cord protecting the world’s most influential central bank. The Fed’s charter allows removal only “for cause,” a standard last tested in 1936; Cook’s 14-year tenure was meant to shield policy from electoral whims. Global investors noticed: the dollar slipped 0.4 %, and 10-year Treasury yields jumped five basis points within an hour. (reuters.com, apnews.com, ft.com, theguardian.com)

I see a deeper pattern. Since Erdoğan purged Turkey’s central bankers in 2019, populist leaders from Brasília to Buenos Aires have treated monetary guardians as partisan obstacles. Each episode preceded capital flight and higher inflation. America is now flirting with that same volatility even as headline CPI, down to 2.3 % from 9 % in 2022, still exceeds the Fed’s target. History suggests credibility, once lost, is expensive to rebuild. (reuters.com, apnews.com)

The clash also exposes a contradiction: Trump blames high rates for household pain while his own tariff threats and fiscal looseness stoke the very inflation the Fed is fighting. Undermining independence may deliver short-term political gain, yet risks a systemic premium on U.S. borrowing that outlives any presidency. As former RBI chief Raghuram Rajan warns, “A central bank’s true power is the trust it commands.” (reuters.com)

— The Gist AI Editor

Tariffs and Tremors

President Donald Trump’s move to oust Federal Reserve Governor Lisa Cook is a significant challenge to the central bank’s long-held independence (Strait Times). This action has rattled investors, contributing to a sell-off in long-term U.S. debt. The gap between long-term and short-term borrowing costs—a key indicator of economic sentiment known as the yield curve—has now stretched to its widest point in three years (FT). A steeper yield curve can signal investor expectations of future inflation and economic turbulence, potentially impacting everything from mortgage rates to business investment.

Tech Regulation and Trade Deals

The EU is standing firm on its “sovereign right” to regulate technology companies, despite threats of new U.S. tariffs (Strait Times). Brussels’ Digital Markets Act (DMA) and Digital Services Act (DSA) aim to curb the power of tech giants, a move President Trump argues harms American firms. In our view, while regulatory overreach is a persistent risk, markets function best with clear and consistent rules, not governance by tariff threats. In a more cooperative vein, Chile and the U.S. are nearing the final stages of a new trade agreement, a positive step for liberalizing commerce (Strait Times).

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

Trump takes his Fed fight to unprecedented level with effort to fire Cook
— Strait Times

Chile in final phase of negotiations to reach trade deal with US, Chilean official says
— Strait Times

EU asserts ‘sovereign right’ to regulate tech after Trump threat
— Strait Times

Opinion | Sanctions Can Help Trump Beat Russia
— Wall Street Journal

Coffee Slips on Signals That Recent Rally Went Too Far
— Bloomberg

Opinion | Should We Believe the AI Doomsayers?
— Wall Street Journal

Ukraine’s Shifting Front

The strategic momentum in Ukraine is tilting, driven as much by politics as by firepower. Since Autumn 2023, Russian forces have been steadily gaining ground, nearly reversing Kyiv’s surprise offensive in the Kursk region from August 2024 (ZDF). This turn of events reveals a stark reality: the conflict’s outcome is now heavily influenced by the political calculus in Washington under President Trump (ZDF). For Europe, this signals a critical vulnerability. Any wavering in US support forces a difficult reassessment of the continent’s own security commitments, potentially fracturing the transatlantic alliance and altering the long-term strategic balance on Europe’s eastern border. The initiative is shifting from the battlefield to the political arena.

Israel’s Squeeze

Prime Minister Netanyahu’s administration is navigating intense, converging pressures. Internally, persistent nationwide protests reflect a growing public demand to end the war in Gaza (ZDF). Simultaneously, international condemnation is mounting over the humanitarian catastrophe, epitomized by the functional collapse of medical facilities like Nasser Hospital in southern Gaza (El Pais). This two-front squeeze—domestic dissent and external censure—creates a volatile political environment. It forces a strategic dilemma: either moderate the war’s conduct or risk deeper international isolation and internal instability. The outcome will have significant ripple effects on regional diplomacy and tests the limits of European influence in the Middle East.

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

Israel: Proteste gegen Gaza-Krieg
— Zdf

Inflation bedroht private Altersvorsorge
— Zdf

‘Cut off my leg, for the love of God! I can’t take it anymore’: The Nasser Hospital bombed by Israel is a symbol of Gaza’s healthcare collapse
— El Pais

Der Ukraine-Krieg im Zeitraffer
— Zdf

Il Medioevo Festival della Lombardia quest’anno punta sul gotico
— Ansa

Governatrice Fed Cook presenta la causa contro Trump
— Ansa