LONDON — Victory is finally in sight for the Bank of England. But rate cuts aren’t. It’s taken Britain’s central bank longer to bring inflation under control than any of its peers on the global stage, but on Thursday economists expect forecasts to show that inflation in the U.K. will return to the government’s 2 percent target within the next two years, having overshot it for almost all of the last four. The pound surged to its highest level against the dollar in five years last month, as global confidence in the anchor of the world’s financial system appeared to fray due to the news flow out of the U.S. But there will be little else to set the pulse racing: Financial market participants are almost unanimous in expecting no change in the Bank rate from its current 3.75 percent. Even the extraordinary events of January, which saw the U.S. seize Venezuelan leader Nicolas Maduro and U.S. President Donald Trump threaten military force against his NATO allies over Greenland, seem unlikely to induce a shift in the Bank’s communication about the U.K.’s economic outlook. Extrapolating how these seismic events will translate into the U.K. economy has been hard. One of the more hawkish members of the Bank’s Monetary Policy Committee, Megan Greene, argued in a speech last month that while a stronger pound should help keep the cost of imports down, it could easily be offset by other factors, especially if the U.S. Federal Reserve were to be pressured by the White House into cutting U.S. interest rates more aggressively. Greene argued the MPC should focus on what is in its power to control. Here, the Bank is facing a familiar conundrum: growth is sluggish and unemployment is trending higher, but inflation is coming down — even if painfully slowly — and most business surveys suggest wage growth will continue to outstrip what is justified by productivity. Headline inflation ticked up again in December to 3.4 percent, still far above the 2 percent target. The latest data suggest that the economy is still more or less ticking along, growing at an annual rate of 1.4 percent in the three months through November. STILL ‘GRADUAL AND CAUTIOUS’ The narrow vote by the MPC to cut the Bank rate to 3.75 percent from 4 percent at its last meeting in December — and the unwavering message from the Bank that it will take a “gradual and cautious” approach to easing policy — means the committee will stay put on Thursday, according to Deutsche Bank economist Sanjay Raja. UBS economist Anna Titareva, meanwhile, reckons the vote will be split, with both Governor Andrew Bailey and Deputy Governor Sarah Breeden capable of voting again for a cut alongside Alan Taylor and Swati Dhingra, the two external members most concerned about the risks of a slowdown and an accompanying rise in joblessness. But that scenario would still leave Bailey in the minority against the remaining five of nine members in the committee. Most analysts still expect the Bank to cut interest rates twice this year. Inflation is set to fall from April as Chancellor Rachel Reeves’ decision to strip green levies off energy bills causes a drop in final prices for electricity. Deutsche’s Raja expects cuts in March and again in June, but says rates are unlikely to fall any further after that.

The UK has historically been a global leader in life sciences innovation, but recent statistics paint a worrying picture for medicines access. The right policy can start to reverse this. We are living in a time where the intersection between breakthrough science, technology and data insights has the potential to transform treatment options for some of the toughest health conditions faced by patients in the UK. The UK has long played a central role in driving innovation when it comes to healthcare, and at Johnson & Johnson (J&J) we were pleased to see some positive signs from the Government at the end of 2025, illustrating an intent to reverse a decade of decline of investment in how the UK values innovative treatments. It was a positive first step, but now the real work begins to enable us to deliver the best possible outcomes for UK patients. To achieve this, our focus must be on ensuring our health system is set up to match the pace and gain the benefits of innovation that science provides. We need a supportive medicines environment that fully fosters growth, because even the most pioneering drugs and therapies are only valuable if they can be accessed by patients when they need them most. > even the most pioneering drugs and therapies are only valuable if they can be > accessed by patients when they need them most. At J&J, we are proud to have been part of the UK’s health innovation story for more than a century. We believe that turning ambition into delivery requires a clearer focus on the foundations that enable innovation to reach patients. We have had a substantial and long-term economic presence, with our expertise serving as the grounds for successful partnerships with patients, healthcare providers, clinical researchers and the NHS. Recent national developments are a step in the right direction The UK Government’s recent announcements on the life sciences industry are an important move to help address concerns around medicines access, innovation and the UK’s international standing. This includes a welcome planned increase to the baseline cost-effectiveness threshold (the first change to be made since its introduction in the early 2000s). While it is crucial to get this implemented properly, this seems like a step in the right direction — providing a starting point towards meaningful policy reform, industry partnership and progress for patients. The true impact of stifling medicine innovation in the UK compared with our peers These positive developments come at a critical time, but they do not fix everything. Over the past decade, spending on branded medicines has fallen in real terms, even as the NHS budget has grown by a third.[i] Years of cost-containment have left the UK health system ill-prepared for the health challenges of today, with short-term savings creating long-term consequences. Right now, access to innovative medicines in the UK lags behind almost every major European country[ii]; the UK ranks 16th and 18th among 19 comparable countries for preventable and treatable causes of mortality.[iii]These are conditions for which effective medicines already exist. Even when new medicines are approved, access is often restricted. One year after launch, usage of innovative treatments in England is just over half the average of comparator countries such as France, Germany and Spain.[iv] The effect is that people living with cancer, autoimmune conditions and rare diseases wait longer to access therapies that are already transforming lives elsewhere in Europe. And even at its new level, the UK’s Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG) clawback rate remains higher than in comparable countries.[v] J&J is committed to working together to develop a new pricing and access framework that is stable, predictable and internationally competitive — enabling the UK to regain its position as a leading destination for life sciences. Seeing the value of health and medicines investment as a catalyst for prosperity and growth Timely access to the right treatment achieves two things; it keeps people healthy and prevents disease worsening so they can participate in society and a thriving economy. New research from the WifOR Institute, funded by J&J, shows that countries that allocate more resources to health — especially when combined with a skilled workforce and strong infrastructure — consistently achieve better outcomes.[vi] > Timely access to the right treatment achieves two things; it keeps people > healthy and prevents disease worsening so they can participate in society and > a thriving economy. The UK Government’s recent recognition of the need for long-term change, setting out plans to increase investment in new medicines from 0.3 percent of GDP to 0.6 percent over the next 10 years is positive. It signals a move towards seeing health as one of our smartest long-term investments, underpinning the UK’s international competitiveness by beginning to bring us nearer to the levels in other major European countries. This mindset shift is critical to getting medicines to patients, and the life sciences ecosystem, including the pharmaceutical sector as a cornerstone, plays a pivotal role. It operates as a virtuous cycle — driven by the generation, production, investment in, access to and uptake of innovation. Exciting scientific developments and evolving treatment pathways mean that we have an opportunity to review the structures around medicines reimbursement to ensure they remain sustainable, competitive and responsive. At J&J, we have the knowledge and heritage to work hand-in-hand with the Government and all partners to achieve this. Together, we can realise the potential of medicine innovation in the UK Patients have the right to expect that science and innovation will reach them when they need it. Innovative treatments can be transformative for patients, meaning an improved quality of life or more precious time with loved ones. We fully support the Government’s ambitions for life sciences and the health of the nation. Now is the moment to deliver meaningful change — the NHS, Government and all system partners, including J&J, must look at what valuing innovation actually means when it comes to modernising the frameworks and mechanisms that support access and uptake. Practical ways to do this include: * Establishing a new pricing and access framework that is stable, predictable and internationally competitive. * Evolving medicines appraisal methods and processes, to deliver on the commitments of the UK-US Economic Prosperity Deal. * Adapting thresholds and value frameworks to ensure they are fit for the future — in the context of wider system pressures, including inflation, and the evolution of medical innovation requiring new approaches to assessment and access. > the NHS, Government and all system partners, including J&J, must look at what > valuing innovation actually means when it comes to modernising the frameworks > and mechanisms that support access and uptake. By truly recognising the value of health as an investment, rather than as a cost, we can return the UK to a more competitive position. The direction of travel is positive. At J&J, we stand ready to work in partnership to help ensure the UK is once again the best place in the world to research, develop and access medicines. Follow Johnson & Johnson Innovative Medicine UK on LinkedIn for updates on our business, our people and our community. CP-562703 | January 2026 -------------------------------------------------------------------------------- [i] House of Commons Library (2026). ‘NHS Funding and Expenditure’ Research Briefing. Available at: https://commonslibrary.parliament.uk/research-briefings/sn00724/ (Accessed January 2026). [ii] IQVIA & EFPIA (2025). EFPIA Patients W.A.I.T Indicator 2024 Survey. Available at: https://efpia.eu/media/oeganukm/efpia-patients-wait-indicator-2024-final-110425.pdf. (Accessed January 2026) [iii] The Kings Fund (2022). ‘How does the NHS compare to the health care systems of other countries?’ Available at: https://www.kingsfund.org.uk/insight-and-analysis/reports/nhs-compare-health-care-systems-other-countries (Accessed January 2026) [iv] Office for Life Sciences (2024). Life sciences competitiveness indicators 2024: summary. Available at: https://www.gov.uk/government/publications/life-sciences-sector-data-2024/life-sciences-competitiveness-indicators-2024-summary (Accessed January 2026). [v] ABPI. VPAG payment rate for newer medicines will be 14.5% in 2026. December 2025. Available at: https://www.abpi.org.uk/media/news/2025/december/vpag-payment-rate-for-newer-medicines-will-be-145-in-2026/. (Accessed January 2026). [vi] WifOR Institute (2025). Healthy Returns: A Catalyst for Economic Growth and Resilience. Available at: https://www.wifor.com/en/download/healthy-returns-a-catalyst-for-economic-growth-and-resilience/?wpdmdl=360794&refresh=6942abe7a7f511765977063. (Accessed January 2026).

Iranian President Masoud Pezeshkian on Saturday accused the U.S., Israel and Europe of exploiting Iran’s economic crisis to incite unrest and “tear the nation apart,” following nationwide protests over soaring inflation and rising living costs. U.S. President Donald Trump, Israeli Prime Minister Benjamin Netanyahu and European leaders “provoke, create division, and supplied resources, drawing some innocent people into this movement,” Pezeshkian said in a state TV broadcast, according to media reports. Pezeshkian added that the unrest was not merely a social protest but a coordinated effort to sow division. “Everyone knows that the issue was not just a social protest,” he said. The protests, which erupted at the end of 2025 after a sharp decline of the Iranian economy, were met with an increasingly brutal government crackdown, including mass arrests, killings, and a near-total internet shutdown. Rights organizations say thousands have been killed or detained. The U.N. Human Rights Council held an emergency session, noting that the violence against protesters in recent weeks is the deadliest since the 1979 Iranian revolution. In Washington, Trump has repeatedly promised the protesters that “help is on the way,” while Israeli forces have increased their regional presence. In recent weeks, Trump has advocated for “new leadership” in Iran and warned of potential military action in response to the crackdown. The European Union on Thursday designated the Iranian Revolutionary Guard Corps as a terrorist organization following the crackdown. “Repression cannot go unanswered,” EU top diplomat Kaja Kallas wrote on X. “The EU already has sweeping sanctions in place on Iran — on those responsible for human rights abuses, nuclear proliferation activities and Tehran’s support for Russia’s war in Ukraine — and I am prepared to propose additional sanctions in response to the regime’s brutal repression of protesters,” she told POLITICO earlier this month. 

President Donald Trump on Tuesday said he has no problem with the sharp decline in the dollar that’s been triggered by convulsions in global bond markets and growing skepticism about the U.S.’s reliability as a trading partner. “I think it’s great,” Trump told reporters in Iowa when asked about the currency’s decline. “Look at the business we’re doing. The dollar’s doing great.” Trump has long maintained that a weaker currency helps industries that he’s seeking to boost — particularly manufacturers, but also oil and gas. And U.S. corporations that export goods and services abroad typically report stronger earnings when they can convert foreign payments into a weaker greenback. But a soft dollar also diminishes the purchasing power of U.S. businesses and consumers and can lead to higher inflation. That’s one reason why Treasury officials, including Secretary Scott Bessent, have historically advocated for a stronger dollar. Some of Trump’s other advisers — including Fed Gov. Stephen Miran, who’s on leave from his role as the president’s top economic adviser — argue that the dollar’s strength in recent years has placed domestic businesses at a competitive disadvantage to overseas-based companies. The greenback was trading at its lowest level in nearly four years before Trump weighed in on its recent declines. After the president’s remarks, its value sank even further against a basket of foreign currencies. Trump’s foreign policy agenda and repeated tariff threats — including his push to acquire Greenland — have amplified a “sell America” narrative that has hurt the dollar and other U.S. asset prices. A possible intervention to prop up the value of the Japanese yen has also pushed down the dollar over the last week.

Its been a bad stretch of polling for President Donald Trump. In recent weeks, a string of new polls has found Trump losing ground with key constituencies, especially the young, non-white and low-propensity voters who swung decisively in his direction in 2024. The uptick in support for Trump among those non-traditional Republican voters helped fuel chatter of an enduring “realignment” in the American electorate — but the durability of that realignment is now coming into doubt with those same groups cooling on Trump. Surveying the findings of the most recent New York Times-Siena poll, polling analyst Nate Cohn bluntly declared that “the second Trump coalition has unraveled.” Is it time to touch up the obituaries for the Trumpian realignment? To find out, I spoke with conservative pollster and strategist Patrick Ruffini, whose 2024 book “Party of the People” was widely credited with predicting the contours of Trump’s electoral realignment. Ruffini cautioned against prematurely eulogizing the GOP’s new coalition, noting that the erosion of support has so far not extended to the constituencies that have served as the primary drivers of the Trumpian realignment — particularly white working-class voters and working-class Latinos and Asian Americans. But he also acknowledged that the findings of the recent polls should raise alarms for Republicans ahead of 2026 and especially 2028. His advice to Trump for reversing the trend: a relentless focus on “affordability,” which the White House has so far struggled to muster, and which remains the key issue dragging down the president. “I think that is undeniable,” he said. “It’s the number one issue among the swing voter electorate.” This conversation has been edited for length and clarity. Based on your own polling, do you agree that “the second Trump coalition has unraveled?” It really depends on how you define the Trump coalition. The coalition that has really reshaped American politics over the last decade has been a coalition that saw voters who are aligned with a more populist view of America come into the Republican Party — in many cases, after voting for Barack Obama twice. Those shifts have proven to be pretty durable, especially among white working-class voters but also among conservative Hispanic voters and conservative Asian American voters. You have another group of voters who is younger and disconnected from politics — a group that had been really one of the core groups for Barack Obama and the Democrats back in the 2010s. They didn’t always vote, but there was really no hope or prospect for Republicans winning that group or being very competitive with that group. That happens for the first time in 2024, when that specific combination of young, minority, male voters really comes into play in a big way. But that shift right has proven to be a little bit less durable — and maybe a lot less durable — because of the nature of who those voters are. They’re not really connected to one political party, and they’re inherently non-partisan. So what you’re seeing is less of a shift among people who reliably vote in midterms, and what we are seeing is more of a shift among those infrequent voters. The question then becomes are these voters going to show up in 2026? How big of a problem is it for Republicans if they don’t? How alarmed should Republicans be by the current trends? I think they’re right to focus on affordability. You’ve seen that as an intentional effort by the White House, including what seems like embracing some Democratic policy proposals that also are in some ways an end-run around traditional Republican and conservative economics — things like a 10 percent cap on credit card interest. What’s the evidence that cost of living is the thing that’s primarily eroding Republican support among that group of voters you described? I think that is undeniable. It’s the number one issue among the swing voter electorate. However you want to define the swing voter electorate in 2024, cost of living was far and away the number one issue among the Biden-to-Trump voters in 2024. It is still the number one issue. And that’s because of demographically who they are. The profile of the voter who swung in ‘24 was not just minority, but young, low-income, who tends to be less college-educated, less married and more exposed to affordability concerns. So I think that’s obviously their north star right now. The core Democratic voter is concerned about the erosion of norms and democracy. The core Republican voter is concerned about immigration and border security. But this swing vote is very, very much concerned about the cost of living. Is there any evidence that things like Trump’s immigration crackdown or his foreign policy adventurism are contributing at all to the erosion of support among this group? I have to laugh at the idea of foreign policy being decisive for a large segment of voters. I think you could probably say that, to the extent that Trump had some non-intervention rhetoric, there might be some backlash among some of the podcast bros, or among the Tucker Carlson universe. But that is practically a non-entity when it comes to the actual electorate and especially this group that is floating between the two political parties. Maybe there’s a dissident faction on the right that is particularly focused on this, but what really matters is this cost-of-living issue, which people don’t view as having been solved by Trump coming into office. The White House would say — and Vance said recently — that it takes a while to turn the Titanic around. Which is not the most reassuring metaphor, but sure. Exactly, but nonetheless. I think a lot of these things are very interesting bait for media, but they are not necessarily what is really driving the voters who are disconnected from these narratives. What about his immigration agenda? Does that seem to be having any specific effect? I do think there’s probably some aspect of this that might be challenging with Latinos, but I think it’s very easy to fall back into the 2010 pattern of saying Latino voters are inordinately primarily focused on immigration, which has proven incorrect time after time after time. So, yes, I would say the ICE actions are probably a bit negative, but I think Latino voters primarily share the same concerns as other voters in the electorate. They’re primarily focused on cost of living, jobs and health care. How would Trump’s first year in office have looked different if he had been really laser-focused on consolidating the gains that Republicans saw among these voters in 2024? What would he have done that he didn’t do, and what shouldn’t he have done that he did do? I would first concede that the focus on affordability needed to be, like, a Day 1 concern. I will also concede how hard it is to move this group that is very, very disaffected from traditional politics and doesn’t trust or believe the promises made by politicians — even one as seemingly authentic as Trump. I go back to 2018. While in some ways you would kill for the economic perceptions that you had in 2018, that didn’t seem to help them much in the midterms. The other problem with a laser focus on affordability on Day 1 is that I don’t think it clearly aligns with what the policy demanders on the right are actually asking for. If you ask, “What is MAGA economic policy?”, for many, MAGA economic policy is tariffs — and in many ways, tariffs run up against an impulse to do something about affordability. Now, to date, we haven’t really seen that actually play out. We haven’t really seen an increase in the inflation rate, which is good. But there’s an opportunity cost to focusing on certain issues over this focus on affordability. I think the challenge is that I don’t think either party has a pre-baked agenda that is all about reducing costs. They certainly had a pre-baked agenda around immigration, and they do have a pre-baked agenda around tariffs. What else has stopped the administration from effectively consolidating this part of the 2024 coalition? It’s a very hard-to-reach group. In 2024, Trump’s team had the insight to really put him front-and-center in these non-political arenas, whether it was going to UFC matches or appearing on Joe Rogan. I think it’s very easy for any administration to come into office and pivot towards the policy demanders on the right, and I think that we’ve seen a pivot in that direction, at least on the policy. So I would say they should be doing more of that 2024 strategy of actually going into spaces where non-political voters live and talking to them. Is it possible to turn negative perception around among this group? Or is it a one-way ratchet, where once you’ve lost their support, it’s very hard to get it back? I don’t think it’s impossible. We are seeing some improvement in the economic perception numbers, but we also saw how hard it is to sustain that. I think the mindset of the average voter is just that they’re in a far different place post-Covid than they were pre-Covid. There’s just been a huge negative bias in the economy since Covid, so I think any thought that, “Oh, it would be easy that Trump gets elected, and that’s going to be the thing that restores optimism” was wrong. I think he’s taken really decisive action, and he has solved a lot of problems, but the big nut to crack is, How do you break people out of this post-Covid economic pessimism? The more critical case that could be made against Trump’s approach to economic policy is not just that he’s failed to address the cost-of-living crisis, but that he’s actively done things that run contrary to any stated vision of economic populism. The tax cuts are the major one, which included some populist components tacked on, but which was essentially a massively regressive tax cut. Do you think that has contributed to the sour feeling among this cohort at all? I think we know very clearly when red lines are crossed and when different policies really get voters writ large to sit up and take notice. For instance, it was only when you had SNAP benefits really being cut off that Congress had any impetus to actually solve the shutdown. I don’t think people are quite as tuned in to the distributional effects of tax policy. The White House would say that there were very popular parts of this proposal, like the Trump accounts and no tax on tips, that didn’t get coverage — and our polling has shown that people have barely actually heard about those things compared to some of the Democratic lines of attack. So I think that the tax policy debate is relatively overrated, because it simply doesn’t matter as much to voters as much as the cultural issues or the general sense that life is not as affordable as it was. Assuming these trends continue and this cohort of sort of young, low-propensity voters continues to shift away from Trump, what does the picture look like for Republicans in 2026 and 2028? I would say 2026 is perhaps a false indicator. In the midterms, you’re really talking about an electorate that is going to be much older, much whiter, much more college-educated. I think you really have to have a presidential campaign to test how these voters are going to behave. And presidential campaigns are also a choice between Republicans and Democrats. I think certainly Republicans would want to make it into a Republican-versus-Democrat choice, because polling is very clear that voters do not trust the Democrats either on these issues. It’s clear that a lot of these voters have actually moved away from the Democratic Party — they just haven’t necessarily moved into the Republican Party. Thinking big picture, does this erosion of support change or alter your view of the “realignment” in any respect? I’ve always said that we are headed towards a future where these groups are up for grabs, and whichever party captures them has the advantage. That’s different from the politics of the Obama era, where we were talking about an emerging Democratic majority driven by a generational shift and by the rise of non-white voters in the electorate. The most recent New York Times poll has Democrats ahead among Latino voters by 16 points, which is certainly different than 2024, when Trump lost them by just single digits, but that is a far cry from where we were in 2016 and 2018. So I think in many respects, that version of it is coming true. But if 2024 was a best-case scenario for the right, and 2026 is a worst-case scenario, we really have to wait till 2028 to see where this all shakes out.

Republican lawmakers breathed a collective sigh of relief Wednesday after President Donald Trump said he wouldn’t use force to seize Greenland. Trump’s surprise announcement removed the immediate threat of a military escalation that could have shattered the NATO alliance. It also offered a momentary reprieve for Republicans who risked either crossing the president or embracing an unpopular military intervention that could cost them in November. Republicans instead discounted that Trump was ever serious about conquering the island, even as they appeared to support acquiring Greenland for national security reasons. “All of us knew it was never on the table, but it’s very helpful that he said that,” House Armed Services Chair Mike Rogers (R-Ala.) said in an interview. “We need to start talking about more reasonable pathways to having a better relationship with Greenland, ideally a territory one day.” Speaker Mike Johnson pushed back on the idea that Trump was serious about taking over the Arctic island. “I don’t think that was ever his intent, and so I’m glad he clarified,” he said. “I’ve been speaking with him a lot along the way, and I don’t think anyone here in this building or at the White House ever expected that troop deployment to Greenland was a necessary option.” Trump, in a speech at the World Economic Forum in Davos, Switzerland, insisted, “I don’t want to use force,” even as he bashed NATO allies for not selling Greenland to the U.S. “We probably won’t get anything unless I decide to use excessive strength and force, where we would be, frankly, unstoppable, but I won’t do that,” Trump said. “That’s probably the biggest statement I made, because people thought I would use force, but I don’t have to use force.” The president, in a Truth Social post hours later, called off a plan to impose tariffs on European nations and said he’d struck a “framework of a future deal” in a meeting with NATO Secretary General Mark Rutte. Several top Republicans, including Senate Armed Services Chair Roger Wicker (R-Miss.) and Senate Defense Appropriations chief Mitch McConnell (R-Ky.), had pushed back against Trump’s threats against Greenland — a rare rebuke that signaled just how seriously they took the situation. But many Republicans still appeared to support the idea of acquiring Greenland through negotiations given its strategic Arctic location — or at least beefing up the U.S. military presence there. Rep. Ken Calvert (R-Calif.), who chairs the House panel that controls Pentagon spending, suggested the Trump administration could seek “a better agreement” with Denmark. He argued that only the U.S. would ever spend the money in Greenland needed to defend North America. “We never were going to use force. Come on,” he said. “This isn’t Venezuela, for God’s sake.” Sen. Lindsey Graham (R-S.C.), a close Trump ally and vocal defense hawk, expressed support for “a lawful and fair process” to acquire the island. Trump “rightly removed the option of taking Greenland by force,” he said. Polling data reveals the challenge Republicans face with Trump’s call for military action. GOP voters are overwhelmingly aligned with the president’s foreign policies and many support acquiring Greenland peacefully. But they draw a sharp line at troop deployments. Around 64 percent of Republicans approve of buying Greenland, according to a new CBS poll, although only 30 percent of Americans overall agree. Eighty-six percent of voters overall and 70 percent of Republicans disapprove of taking the island by military force. “Flexing America’s power is different from putting in American troops,” said Amy Walter, editor-in-chief of the nonpartisan Cook Political Report. “Capturing [Venezuelan leader Nicolás] Maduro, Republicans absolutely love it. Should we put military troops there? Well, no.” Republicans were unlikely to ride to Greenland’s rescue if it meant defying Trump, she said. More than 80 percent of House Republicans represent districts Trump won by double digits, and lawmakers have little incentive to break publicly with a president who backs primary challenges against his enemies. The issue also gave Democrats a ready-made midterms attack line to reinforce their argument that Republicans are focused on distractions abroad and not voters’ pocketbook issues. “You can kind of hear the Democratic ads already: ‘Congressman so-and-so thinks it’s okay for our $700 billion dollars to go to Greenland instead of to hard-working American families,’” Walter said. Rep. Don Bacon (R-Neb.), one of the few vocal Republican opponents of Trump’s threats to Greenland, said he and many of his colleagues felt the president would do better to focus on the economy ahead of the midterms. “Most of us think it was crazy, with a few exceptions,” Bacon said. “Most of us thought, behind shut doors, he should be bragging on the economy that’s growing at 4.3 percent, wages climbing faster than inflation for the first time in four or five years. But now we’re talking Greenland.” Rep. Brian Fitzpatrick (R-Pa.), who represents one of the GOP’s most competitive swing districts, said Congress should step in if Trump moved toward military action. A member of the NATO Parliamentary Assembly, he plans to go to next month’s Munich Security Conference to try to repair relations with allies. “We’re going to do our part to strengthen the alliance, to calm fears, to let them know we have their back and that we would never, ever allow that to happen,” he said. Jordain Carney contributed to this report.

STRASBOURG — The European Parliament plans to ask the European Commission on Monday to start the process for activating the bloc’s most powerful trade weapon against the United States, a senior trade lawmaker said on Wednesday. “I expect that the coordinators will decide to request to start the investigation procedure of the [Anti-Coercion Instrument]. Of course, between now and Monday there’s a lot of time and we will see what will happen,” trade committee chair Bernd Lange told reporters in Strasbourg. The statement by Lange, a German Social Democrat, comes as relations between the EU and the United States hit an all-time low, following President Donald Trump’s threats to seize Greenland, a self-governing Danish territory. Trump has also threatened to impose tariffs on European countries that have rallied to Copenhagen’s side. Resolve within the bloc is growing to hit back against Trump, with the Parliament also formally freezing on Wednesday the ratification of the EU-U.S. trade deal that was struck last summer. “Europe must speak the language Trump understands. We are ready to move forward with the ACI. I would have preferred a decision today, but I hope for a strong and united statement on Monday. We don’t have time to waste,” said Swedish MEP Karin Karlsbro of the liberal Renew group. Jörgen Warborn, the European People’s Party top trade MEP, took a more cautious line, reflecting the party’s transatlantic leanings. “It’s too early to say” if he will agree to ask Commission to launch the ACI, Warborn told reporters. Further, Warborn told POLITICO: “We now need to coordinate further and discuss which options we have in case of further actions. Nothing is off the table.” EU leaders are toughening their position and want the European Commission to ready its trade “bazooka,” with Germany joining France in saying it will ask the Commission to explore unleashing the tool at an emergency meeting of leaders on Thursday unless Trump walks back on his threats, POLITICO reported on Tuesday. The trade weapon, which can be deployed at the request of any affected party, including the European Parliament, is one of the EU’s main levers against the U.S.: It includes a wide range of possible measures such as imposing tariffs, restricting exports of strategic goods, or excluding U.S. companies from tenders. A decision to use the instrument would not be taken lightly because it would have a significant impact on the EU economy. This story has been updated.

President Donald Trump backed down from the most extreme “Liberation Day” tariffs after bond traders revolted at the prospect of economic upheaval. Now, his push to coerce Denmark into ceding Greenland has threatened to trigger a similar market rout. Bond yields spiked and stocks sank on Tuesday as investors reckoned with how Trump’s threat to impose new tariffs on Europe could hammer alliances that are critical to the global economy. That reignited fears that the “Sell America” trade that dominated market narratives last spring could reemerge, undercutting Wall Street’s hopes for U.S. assets in 2026. As global leaders and top financial CEOs gathered in Davos for the World Economic Forum, where Trump is scheduled to speak on Wednesday, the blowback from bond traders threatened to undermine the president’s bullish case for both the U.S. economy and its market outlook. “The narrative just won’t go away,” said Paul Christopher, head of global investment strategy at the Wells Fargo Investment Institute. Foreign investors flooded back into U.S. assets as tensions eased during the latter half of 2025, but now “they’re hedging because they’re not sure what Trump is going to do with tariffs next.” Trump has historically been highly sensitive to how the bond market responds to his policies, and he regularly cites the stock market’s surge as evidence of how his agenda is working. The latest turmoil has echoes of the volatility that hit global bond markets shortly after he announced eye-popping tariffs last April on dozens of trading partners at a White House press conference. The president later announced a temporary pause on the new import duties after the bond market started “getting a little bit yippy,” in his words. His threat on Saturday to impose more tariffs on Europe sparked a similar response. The Dow Jones Industrial Average fell by more than 870 points on Tuesday. The Nasdaq and S&P 500 both closed down by more than 2 percent — erasing the gains notched through the first three weeks of the year. Yields on the 10-year and 30-year Treasury securities — which are benchmark rates for consumer and corporate lending products — jumped to their highest levels since last September, and the dollar sank. The president warned that he would impose additional 10 percent tariffs on eight European countries that have sought to block his ambitions to acquire Greenland, the sparsely populated Danish territory that’s been a fixation of the president since his first term. French President Emmanuel Macron has said he’s planning to activate the EU’s so-called trade bazooka — the Anti-Coercion Instrument — to respond to Trump’s saber rattling. That would allow the EU to impose restrictions on investment and access to public procurement schemes, as well as limits on intellectual property protection. The White House pushed back on the notion that the markets were rejecting Trump’s policies. “The S&P 500 is up over 10 percent and 10-year Treasury bond yields are down nearly 30 basis points over the past year because the markets have confidence in the Trump administration’s pro-growth, pro-business policies,” White House spokesperson Kush Desai said. “Accelerating GDP growth, cooled inflation, and over a dozen historic trade deals all prove that this Administration continues to deliver for American workers and companies.” Banking leaders — including Bank of America CEO Brian Moynihan, Citi’s Jane Fraser and State Street’s Ron O’Hanley — signaled optimism at the U.S.’s economic outlook in separate media appearances in Davos as they urged government leaders to find a resolution. “Let the people go to work,” Moynihan told CNBC. “They’re here in this beautiful place, and they’ve got a week to a few days to work on it. So, give them 48 hours and see if they can come up with solutions.” Throughout his first year back in the White House, Trump’s costly tariffs and insistence that Europe do more to finance its own defense have caused economic disruption and forced leaders across the continent to reckon with the possibility that the U.S. is no longer as strong a partner as it once was. And while markets have grown increasingly confident that the president’s frequent escalations result in policies that are far less severe than his initial threats, finding an off-ramp in the fight over Greenland’s future could prove challenging. “The market’s very complacent to the idea that this is just a negotiating tool,” said Brij Khurana, a fixed-income portfolio manager at Wellington Management. “I’m more nervous about it because I don’t, I don’t see what the middle ground is here.” In an appearance on Fox Business from Davos on Tuesday, Treasury Secretary Scott Bessent said it’s “very difficult to disaggregate” the market’s reaction to Trump’s Greenland push from a massive sell-off in Japanese bonds that was triggered by mounting concerns about the country’s fiscal trajectory. As European leaders consider taking steps to retaliate against Trump, Bessent urged caution. “Sit back, take a deep breath, do not retaliate,” he said. “The president will be here tomorrow, and he will get his message across.” Aiden Reiter contributed to this report.

FRANKFURT — No one saw this coming. Eurozone finance ministers on Monday picked Croatia’s central bank governor, Boris Vujčić, as the European Central Bank’s next vice president — defying all expectations and the European Parliament’s calls for someone else. Ministers chose Vujčić over his Finnish counterpart Olli Rehn, the favorite to win, in the third and final round of voting after seeing off other heavyweight contenders in Portugal’s Mário Centeno and Latvia’s Mārtiņš Kazāks — the Parliament’s preferred picks for the job. Estonia’s Madis Müller and Lithuania’s Rimantas Šadžius lost out in the first round. At a time when the U.S. administration is putting extreme pressure on the Federal Reserve to lower interest rates, the choice of Vujčić — a technocrat with no obvious partisan backing — is a strong signal of the EU’s desire to keep the ECB independent of direct political influence. Barring any last-minute surprises, EU leaders will formally present Vujčić to succeed incumbent Vice President Luis de Guindos when the Spaniard ends his eight-year term on May 31. “Crazy,” was all one diplomat could muster after the vote. Others were more understanding. “He is the most senior central banker of them all,” a second said on the condition of anonymity. Vujčić needed 16 votes from ministers who represent 65 percent of the eurozone’s population, meaning he had the support of the euroclub’s largest members to clinch victory. Germany, France and Spain will all have been thinking strategically ahead of Monday’s vote, which kicks off a game of musical chairs for a place at the ECB’s coveted six-person Executive Board over the next two years. The vice presidency is the first of four board vacancies, including the presidency, that will come up in that time. All are important positions for the eurozone’s biggest economic powerhouses. By tapping Vujčić for the no. 2 job, capitals have kept the playing field wide open — especially when it comes to finding a successor for ECB President Christine Lagarde once her term ends on Oct. 31, 2027. Vujčić now faces an awkward hearing in Parliament, whose non-binding preference for the post was completely ignored by finance ministers. The 61-year-old will need to bring Parliament onside to avoid MEPs voting against his victory in a symbolic, but politically embarrassing, ballot — a similar fate to when Luxembourg’s governor, Yves Mersch, joined the ECB’s highest echelon in 2012. DARK HORSE Vujčić has vast experience as a central banker, having led the Croatian National Bank since 2012, and is highly regarded among fellow rate-setters. But his appointment will still come as a massive surprise to ECB watchers who have long bet on Rehn. Rehn’s dual experience in Brussels politics and monetary policy had widely been seen as giving him an edge over his five rivals. Croatia’s chances were seen as slim from the outset, as it only joined the eurozone in 2023, placing it toward the back of the queue for a seat at the Executive Board. None of the three Baltic states, which adopted the euro roughly a decade earlier than Croatia, have yet had a representative serve on the Board. While generally considered a moderate hawk, Vujčić defies the usual northern-hawk-versus-southern-dove classification that has historically dominated debates when politicians haggle over coveted positions at the ECB. His appointment is thus unlikely to change the probability of either a northern heavyweight such as Germany or the Netherlands, or a southern contender such as Spain, securing the presidency. Current front-runners for the top job include former Dutch central bank chief Klaas Knot and Bank for International Settlements head Pablo Hernández de Cos. But in European politics, two years is an eternity. Lagarde herself only emerged as a serious candidate late in the process to name a successor for Mario Draghi, showing how fast the ECB’s leadership race can turn.

Mark T. Kimmitt is a retired U.S. Army brigadier general and has also served as the Deputy Assistant Secretary of Defense for Middle East Policy. Despite the stern face portrayed on Iran’s government television, Ayatollah Ali Khamenei is facing the most significant challenge to his legitimacy since assuming power in 1989. Indeed, the view from the supreme leader’s office Beit-e Rahbari must be quite parlous, with security forces gunning down peaceful protestors who took to the streets amid a collapsing economy, inflation out of control and a water catastrophe unseen in modern times. On top of that looms the threat of U.S. President Donald Trump, and the knowledge that Israel would be happy to assist in any move Washington might make. Even Khamenei’s recent outreach toward the U.S. — a tried-and-true method to buy time and diminish expectations — doesn’t seem to be working this time. But the ayatollah isn’t delusional, and must surely recognize he needs a lifeline. I believe he would do well to take one, and that Trump would do well to make such an offer. The recent U.S. operation in Venezuela is perhaps instructive here. The U.S. isn’t seeking a change in the Venezuelan regime, merely a change in its behavior, and is prepared to maintain the status quo. However, unlike the vague threat of drugs, sanctions-busting oil sales or longstanding Chavismo in America’s backyard, the threats from Iran are specific, existential and have been consistent over the years. A deal on those threats — Iran’s development of nuclear weapons, its missile program and its vast destabilizing proxy network — will be the terms of any perpetuation of the regime. And it must also include forgiveness for the protestors, protection of the right to peaceful future demonstrations, and the transparent prosecution of those responsible for killing unarmed civilians. For the U.S., airstrikes against key regime targets should be considered, as without a kinetic demonstration of resolve, the regime may believe it can withstand Washington’s rhetorical pressure. Strikes would also be an opportunity to bring the Revolutionary Guard Corps (IRGC) and its paramilitary Basij elements responsible for the killing of thousands of protestors to justice, and to again hit missile and nuclear targets still recovering from the blows they took back in June. But airstrikes also come with two major risks. The first is casualties and prisoners: Iran’s regime has a long history of hostage-taking, from the U.S. Embassy takeover in 1979 to the U.S. hostages incarcerated today. The risk of American troops rotting in Evin Prison is one Washington will want to avoid. Second, airstrikes risk retaliation on U.S. bases within range of Iran’s vast rocket, missile and terrorist networks. The June 2025 attack on Al-Udeid Airbase in Qatar is a clear sign that Iran is able and willing to fire on the U.S., and in the current scenario a larger response and casualties should be expected. Now let’s look at the terms of a possible deal. Before anything else, Iran’s nuclear weapons development program must cease. Despite all the talks, deals and commitments over the years, Iran has been able to evade a system of inspection, verification and penalties to ensure it lives up to its obligations under the Nuclear Non-Proliferation Treaty. This must be the unequivocal baseline of any lifeline to the regime and a precondition for any further discussions. Next, the Iranian missile development program must also cease. For years, Iran has continued to produce long-range rockets and missiles at scale and proliferate them across the region. This allowed the Houthis to block the Red Sea and Hezbollah and Hamas to threaten and attack Israel, and it equipped the sanctioned Hashd factions in Iraq to attack U.S. units and threaten the elected government. So, again, any possible deal must call for inspection, verification and punitive actions in instances of violation. Lastly, the cancerous regional proxy network that Iran has armed, trained and equipped for a decade must be cut off from the country’s financial and military support. It must also be delinked from extrajudicial governance in Lebanon, Yemen and Iraq. These proxies — Hezbollah, Hamas and the Houthis — have been defeated and deterred from continued activity since Oct. 7, 2024, but only for the moment. Without any formal termination of support, they will undoubtedly return. Once again, the message to Iran must be to break with the proxies or face punitive action. Without concrete movement on these three elements, Khamenei and his regime face a bleak future. Donald Trump has told Iranian protestors that “help is on the way.” | Dingena Mol/EPA But even if this set of conditions is offered, expect the regime to react in its normal manner: delay, deflect, deny — diplomatic tools that have been successfully used by brilliant Iranian negotiators over the years. This stratagem must be quickly brushed aside by America’s interlocutors, who won’t be there to please or appease but to impose. In short, such an offer from the U.S. would mean a perpetuation of the regime, relief from sanctions, help with runaway inflation, and assistance in facing a climate catastrophe. But it would also come at a cost and with a choice — for Khamenei, either a lifeline or a noose. In all of this, the Iranian leader would do well to consider Trump’s first term, when the U.S. took the feared Iranian Gen. Qassem Soleimani off the battlefield with a drone in 2020, as well as his ongoing second term, particularly the 12-day war of 2025 and the recent apprehension of Venezuelan dictator Nicolás Maduro by U.S. special forces. There’s plenty of room in Maduro’s wing at the Brooklyn Detention Center for IRGC Deputy Commander-in-Chief Ahmad Vahidi and his accomplice Esmail Qaani, or side by side with Soleimani. Moreover, Iran has yet to rebuild its air-defense network after its disembowelment last year, and it still has hundreds of military and infrastructure targets that U.S., Israeli and other coalition pilots are ready to attack. Khamenei would also do well to remember that even if the protest is put down by killings, its underlying causes — inflation, sclerotic social norms and crippling water rationing — will remain. Trump has told Iranian protestors that “help is on the way” — and that could be interpreted as an offer to the regime as well. But Khamenei must accept he faces a U.S. president who is willing to ignore decades of diplomatic niceties and one-sided concessions in favor of finishing the job of destroying Iran’s nuclear program. One can only hope wisdom carries the day at Beit-e Rahbari, and that finally this time is different.