Axios

The Pentagon instructed U.S. Central Command several days ago to conclude preparations for resuming major combat operations in Iran, U.S. officials said.

Why it matters: The directive didn't include a specific date for launching strikes, and President Trump hasn't made any final decisions. But U.S. and Israeli sources say it could happen before the U.S. midterm elections and possibly the Israeli elections a week earlier.

Police and protesters clashed in Liège, Belgium, on Wednesday as student anger over education costs and school conditions grew, echoing massive protests in neighboring France.

Why it matters: The protests are exposing broader anger across Europe over school funding and classroom conditions.

The U.S. is coordinating across federal agencies to monitor travelers arriving from Siberia as a pneumonic plague case draws international concern, CDC director Erica Schwartz said Wednesday.

Why it matters: Pneumonic plague can spread from person to person and is the deadliest version of the disease, with a near 100% fatality rate if left untreated.

President Trump threatened Wednesday to fire two of his top political consultants if he finds a conflict, after reports that they advised a Russia-aligned government ahead of local elections there.

Why it matters: Chris LaCivita and James Blair are leading Republicans' midterm election strategy, putting their foreign consulting work in tension with their prominent roles in Trump's political operation.

Saudi Arabia and Syria are discussing sending Syrian troops to Yemen to join the counteroffensive against the Houthi rebels, three U.S. officials told Axios.

• Syrian President Ahmed al-Sharaa is seriously considering it, but he hasn't decided.

Why it matters: While the discussion is mostly between Saudi Arabia and Syria, the Trump administration has been consulted by both countries and is not opposed in principle to such a move, the U.S. officials said.

Pressure continues to mount on Russia to release information about the suspected pneumonic plague case, which remains shrouded in uncertainty nearly a week after reports first surfaced.

Why it matters: Russia says there's no pneumonic plague outbreak or broader public health risk, but international officials say they have insufficient information to assess what happened.

Federal Reserve officials worried that higher costs tied to energy, AI investment and other shocks could spill over into broader, more persistent inflation, according to the minutes from the central bank's Sept. 15-16 meeting.

Why it matters: That meeting concluded with the Fed's first interest rate increase in three years. The minutes show that "several" officials thought rates were doing little to restrain the economy, raising the stakes for further increases down the line.

Michigan Republican Senate nominee Mike Rogers called for an immediate end to President Trump's tariff war with Canada in a new ad Wednesday.

Why it matters: Trump endorsed Rogers, but Rogers has increasingly broken with the president as he fights to win a tight race against Democratic nominee Abdul El-Sayed.

Jon Rahm is exiting LIV Golf after deeming the league's reinvention plan "unacceptable," an attorney for the Spanish star confirmed Wednesday.

Why it matters: Rahm's departure marks a significant blow to the effort to create "LIV 2.0" after the league filed for Chapter 11 bankruptcy protection in September.

The German auto industry — long renowned for its engineering prowess and marketing genius — is reeling from stiffening competition, trade threats and shifting consumer tastes.

Why it matters: Volkswagen, Mercedes-Benz and BMW have been a powerful force on the global auto market for decades — but the market has shifted sharply.

The good news about the epic shifts in global bond markets is that they mostly reflect economic fundamentals, not the kinds of panicky swings seen in a crisis.

• The bad news is that there's a risk the disruptions metastasize into a broader crisis in an era of fractured politics across major democracies.

The big picture: Turmoil in the streets this week in France is the latest sign of hazards that await elected leaders who try to address yawning fiscal deficits head-on.

• They are squeezed between voters who want to maintain public benefit levels and tax levels and a bond market that is resetting long-term interest rates higher — meaning that carrying on with wide deficits will come at a greater and greater cost to service debt.
• That's why even what has been a relatively orderly repricing so far carries risks that are bigger than just high mortgage or corporate borrowing rates.

Driving the news: The relentless upward march of bond yields continued Wednesday morning. The French 10-year yield soared 0.18 percentage point, to 4.93%.

• French yields are also surging relative to other countries that use the euro, especially Germany — the kind of fragmentation seen in the eurozone debt crisis of the early 2010s that originated in Greece.
• But France is not alone. U.K. 10-year yields are up 0.12 point, to 5.49%, while the 10-year U.S. Treasury yield is up 0.08 point Wednesday morning, reaching 5.36%, the highest since 2002.

Reality check: These are massive moves in markets that form the bedrock of global financial markets. And yet they don't appear to be driven by the kind of crisis dynamics and forced selling that fueled bond market volatility in the 2008 crisis, the 2014 Treasury flash crash and the March 2020 pandemic.

• Rather, they've been driven by bottomless demand for capital from AI hyperscalers and deficit-running sovereign governments, exacerbated by surging energy prices that increase inflation risk.

What they're saying: "When you look at outright yield levels and/or spreads, a lot of this is still quite rational, and within the realm of what fair valuation should be, just given where nominal growth is and where we are in the cycle," Kunal Shah, the co-CEO of Goldman Sachs International, tells Axios.

• "At this point, I still wouldn't say that we're anywhere close to the point of this being a broad financial stability risk or issue," says Shah, who is also co-head of fixed income, currency and commodities.
• "What policymakers in Europe have shown us, though, is that when there's broader issues on contagion and/or disorderly functioning markets, that's when they can be quick to respond."
• "Whilst the move in spreads has been very quick and sharp, in the broader context, we're still nowhere close to where we had got to in that previous European crisis," he says. "Financial conditions are tightening, but it's still not, I'd say, flashing red to the point that you need a backstop from the policymakers."

Yes, but: The European Central Bank has more powerful tools than it did in 2010 to address imbalances between European countries, and has shown willingness to use them. But it can't do much about the fundamentals of governments spending consistently far more than they raise in taxes.

• And the global nature of the yield surge shows the common fiscal challenge across major economies.

State of play: In France, there have been violent clashes with police as teachers and students protest proposed wage freezes and school funding cuts.

• In the U.K., a central political dispute is over the future of the "triple lock" pension adjustment mechanism, which all but guarantees pension costs will grow faster than the overall economy.
• The U.S. Social Security trust fund is on track to be exhausted in 2032.
• The rate adjustment of the last several weeks will increase already-onerous debt service costs for all advanced countries.

Of note: Those forces can create destabilizing effects for business even apart from the impact on rates. Shah, for example, says that U.K. governments lurching from budget to budget has made it hard for businesses making long-term decisions.

• "I hope that at some point we'll be able to break out of this cycle, because it does stifle confidence and it just makes planning for the long term very hard," Shah says.

Russia's war on Ukraine has sparked a boom in global defense-tech investing, particularly around drones. But very few of those startups are actually based and building in Ukraine.

• Buntar Aerospace is an exception.

Driving the news: Buntar this week raised $16 million led by U.S.-based Freedom Fund VC, following a $10.4 million round earlier this year.

Texas Republican Senate nominee Ken Paxton privately lamented the impact of the Iran war and gas prices on his campaign in a meeting last month, telling a group of donors and lobbyists, "I don't make the decisions," according to audio obtained by Axios.

Why it matters: It's a candid admission from a close Trump ally about the challenging environment Republicans face this cycle.

Israel is marking the third anniversary of the Oct. 7 terror attacks three weeks before an election where Prime Minister Benjamin Netanyahu's personal culpability for the country's worst-ever security failure will be a central issue.

Why it matters: Netanyahu has never looked more politically vulnerable than in the weeks after Oct. 7, but he has defied expectations by keeping his government afloat — presiding over simultaneous wars and an atmosphere of perpetual emergency. Though the polls are tight, they leave a clear path for the ultimate political survivor to hang on yet again.