Global Daily: Red-hot inflation and ice-cold realpolitik

US CPI was red hot. Even if due to things like eggs it leaves egg on the face of the “Rate cuts!” crowd forced to crowd the next Fed into end-2025. Worse, as yields jumped and Fed Chair Powell huffed and puffed in Congress, President Trump demanded lower US rates and said they would sit alongside higher US tariffs, making clear economic statecraft is in and economic policy is out. However, that was far less important than the ice-cold realpolitik served up next. US Defence Secretary Hegseth said the US was pivoting to Asia and Europe must spend 5% of GDP on defence, not 2%, as well as footing the bill to rebuild, rearm, and defend Ukraine: that's as President Trump started peace negotiations with Russia without any European presence.