Flagship

The risk of rising bond yields

A steady increase in US government bond yields is fuelling fears of mounting risks for the global economy. The yield on 10-year Treasury bonds has gained almost a percentage point in recent months, an increase that reflects a widening consensus that the US economy will keep growing at pace, incoming President Donald Trump will likely drive increased borrowing, and the Federal Reserve will keep interest rates higher for longer than previously expected. The impact could be significant, with higher yields not just raising borrowing costs for homeowners and small businesses, but potentially hitting a stock market bull run, and in some periods of history foreshadowing economic crises.

China surplus surges

China’s global trade surplus reached almost $1 trillion as producers rushed out exports ahead of US President-elect Donald Trump’s inauguration next week. Trump has vowed to impose tariffs of as high as 60% on China as well as penalties on other major trading partners, threats that could upend global trade and economic growth. Tariffs could in turn push China to seek stronger ties with developing nations: A new study suggested that Beijing’s trade with the Global South — home to 62% of the world’s population — could surpass $1.2 trillion by 2033. “Geopolitical rivalries, alliances, and aspirations are rewiring the global economy,” Boston Consulting Group said.

Trump’s cabinet vetting to begin

US lawmakers begin vetting President-elect Donald Trump’s appointments this week. Though many of his choices are expected to sail through — Secretary of State nominee Marco Rubio is seen as a shoo-in — others such as the potential intelligence chief and the defense and health secretaries are controversial even among Republicans. Many have begun reversing views which triggered concern, but the sheer number of questions about them and their leader’s policies may make it hard for critics to single out any single candidate, The New Yorker’s David Remnick argued: “One of Trump’s most effective political maneuvers might be called ‘whacking the beehive,’ a propensity to unleash so much buzzing menace into the air that it’s impossible to maintain calm, much less focus.”

LA fires expected to pick up

Firefighters made progress controlling the Los Angeles fires, but renewed high winds today are expected to make the situation worse. At least 24 people have died so far and 16 are missing. The dry seasonal winds died down over the weekend but should reach 60 mph again today. The fires are on track to be among the most expensive disasters in US history, with estimates of financial losses above $250 billion. The art world in particular is reeling from the damage: Dozens of collections are reported lost, with one analyst telling ARTnews that it could be “one of the most impactful art losses ever.” The home and archives of the great 20th-century US composer Arnold Schoenberg are among those burnt.

Japan’s approach to China

Twin efforts by senior Japanese politicians highlight the duality many countries face in dealing with China. Tokyo’s foreign minister today began a tour of Palau, the Philippines, and South Korea, shortly after his country agreed a security deal with Indonesia in an implicit effort to shore up alliances in order to compete with Beijing. At the same time, a delegation of Japanese ruling party lawmakers set off for China to meet Communist Party counterparts for their first such talks since 2018, a sign of the two countries’ slowly warming ties. Taking such concurrent approaches is not unusual in Asia, where countries such as Australia have toughened their security stances even as they have improved trade ties.

Russia’s influence in Europe

Elections in Romania and Croatia remain under the shadow of alleged Russian interference. Thousands of Romanians marched through Bucharest to protest the cancellation of December’s election, over purported Moscow-backed social media campaigns backing an opposition candidate. And researchers said that “pro-Russian, anti-EU, and anti-NATO bot networks” worked to boost the incumbent ahead of the first round of Croatia’s presidential election on Dec. 29. In both cases the alleged recipient of Russia’s support is a populist, anti-NATO, and anti-EU figure: Russian President Vladimir Putin is increasingly gathering support in Eastern and Central Europe, with sympathetic figures already in power or nearing it in Slovakia, Hungary, and Austria.

Maduro rails against sanctions

Venezuela said Western sanctions against it were a “desperate action” as President Nicolás Maduro tightened his grip on power. US sanctions — which came a day after Maduro was inaugurated for a third term after winning a highly disputed election last year — include a $25 million reward for aiding in the arrest of the Venezuelan leader. Opposition leaders have vowed to fight on, albeit clandestinely due to the risk of arrest, El País reported. Meanwhile an influential former president of Colombia, which borders Venezuela, called for his country to be used as a launchpad for a military intervention to “evict” Maduro, who remains in office largely on account of the army’s backing.

Moving beyond identifying barriers to achieving practical, scalable interventions — The Next 3 Billion at Davos will discuss emphasizing collaboration between public and private sectors to mobilize resources and technology for global good.

Semafor’s Yinka Adegoke will moderate a conversation with Phuti Mahanyele-Dabengwa, CEO of Naspers South Africa, to discuss digital upskilling and inclusion.

Jan. 23, 2025 | Davos, Switzerland | Request Invitation

Sudanese Army makes headway

The Sudanese Army said it captured a key city from the paramilitary Rapid Support Forces, one of its biggest gains in the two-year civil war. The RSF attributed the loss to the army’s superior air capabilities as well as the use of Iranian-made drones. Although the army has made significant advances in recent weeks, the leader of the RSF has vowed to fight on for as long as two decades if required, underscoring the dimming hopes for a negotiated ceasefire. Writing in the Financial Times, the former US envoy for the Horn of Africa said any hope at ceasing hostilities lies in external actors — notably the UAE and Saudi Arabia — ending their support for the warring parties.

Scotland opens safe drug facility

The UK’s first safe injection facility for drug users opened in Glasgow, Scotland. Users will be allowed to take drugs, including heroin, under supervision in a safe environment. Supervised injection sites are in use in several European countries, as well as the US, Canada, and Australia, and proponents say that they reduce overdose rates among drug users, although critics argue they increase neighborhood crime and that there is little evidence they save lives in the long term: It is part of a wider debate between harm reduction and prevention in drug policy. Scotland has some of the worst drug problems in Britain, part of why its residents live on average about three years less than the UK average.

How tech is changing sports and film

A US football quarterback who trains in virtual reality has won his first playoff game. Jayden Daniels of the Washington Commanders won plaudits in his rookie season. He uses the VR system at 1.5x speed, so being on the field “felt like slow motion,” he told The Athletic. His Commanders beat Tampa Bay with a last-second field goal, with Daniels having made a touchdown pass to give them a lead. Modern tech is changing unexpected parts of society: After Alain Duval, the actor who dubbed Sylvester Stallone into French for 50 years, died, Stallone’s next movie will be voiced in France by an AI recreation of Duval rather than replacing him.