Bond Rally Fails to Allay Higher-for-Longer Global Rates Threat

The US State Department has approved a proposed military arms sale to Ukraine worth up to $2.7 billion, according to a notification to Congress on the evening of Friday, September 18. The package covers upgrades to air defense systems, weapons and equipment, as well as related equipment and services, including S-300 replica missiles, GAM-67 missiles, longer-range laser-guided rockets, launcher modification kits and mobile firing systems, and counter-drone radars. However, the proposal still requires congressional review, and no final agreement has been reached. If the sale is completed, Ukraine will use funding from European countries together with the US Foreign Military Financing budget, which was allocated during the administration of former US President Joe Biden. The State Department said US funding for this sale will be counted as a contribution to the Ukraine Reconstruction Investment Fund under a one-to-one reimbursement agreement; the fund was established under a minerals agreement signed by the United States and Ukraine last year. The proposed arms sale comes as the administration of President Donald Trump seeks to shift more of the cost of supporting Ukraine onto European countries. Earlier in September, Trump said he would ask European countries to reimburse the United States for military aid and ammunition it had previously delivered to Ukraine. It also follows Trump's signing of legislation on Friday aimed at increasing economic pressure on Russia. Russia launched its full-scale invasion of Ukraine in early 2022, and Trump had pledged to end the conflict between Russia and Ukraine after taking office early last year, but fighting continues even after the first 20 months of his presidency.

The United States has reached an agreement with Greenland and Denmark that will open the way for the US to permanently expand its military and security role on the island of Greenland, while blocking the influence of adversary nations. The three parties are expected to sign jointly during the United Nations General Assembly in New York next week, and the new agreement will replace the 1951 Greenland Defense Agreement. The US State Department stated that the agreement will prohibit countries that are not members of the North Atlantic Treaty Organization, or NATO, from establishing bases or stationing troops in Greenland, and will also bar non-allied countries from investing in mining and critical minerals. These conditions appear aimed at blocking China or Russia from accessing resources or establishing military footholds in Greenland. President Donald Trump posted a message stressing that the United States will be able to do everything necessary to ensure stability and protect the security of Greenland, as well as that of the United States, and confirmed that this is not a transfer of sovereignty or a cession of territory to the US. Meanwhile, Mette Frederiksen, the Prime Minister of Denmark, and Jens-Frederik Nielsen, the Prime Minister of Greenland, confirmed the agreement through a joint statement, with Frederiksen stating that the agreement will help strengthen security in the Arctic and North Atlantic region, while affirming the sovereignty and territorial integrity of the Kingdom of Denmark, as well as the right of Greenlanders to determine their own future.