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What you need to know

Trump pitches a “golden age” in a marathon State of the Union

President Donald Trump’s 2026 State of the Union, delivered last night, was built around a “golden age” theme. He spent much of the first hour arguing that inflation is easing, incomes are rising, markets are firm, and his tax-cutting and deregulatory agenda is gaining traction. He also blamed the Biden administration for lingering cost-of-living pressures.

On the economy and “affordability”, Trump repeatedly said inflation was “plummeting” and portrayed his policies as restoring growth and confidence. At the same time, he acknowledged voters’ irritation with prices.

On immigration and enforcement, he delivered a combative passage that returned to familiar links between border control and crime, while chastising Democrats over funding and oversight of enforcement.

On Iran, Trump said he preferred diplomacy but insisted he would not allow Iran to obtain a nuclear weapon. He offered little operational detail on what would come next.

On energy and electricity demand in the AI era, he urged large technology firms to build, or otherwise supply, their own power for data centers. He framed the idea as a way to protect households and reduce strain on the grid as demand rises.

The address was exceptionally long, about 1 hour 48 minutes, and was described as the longest modern State of the Union.

It leaned heavily into spectacle, with frequent gallery callouts for servicemembers and high-profile guests, alongside multiple award moments, including Medals of Honor.

The chamber was unusually tense, with Democratic boycotts and protests, heckling during the immigration section, and one representative removed after waving a sign.

Foreign policy received comparatively less attention than domestic politics. Despite wider global crises, coverage noted limited discussion of Ukraine and little additional clarity on Iran beyond broad red lines.

Birthplace of civilization

Rubio briefs Congress’s top leaders as Iran tensions rise

Secretary of State Marco Rubio gave a classified briefing on Tuesday to the “Gang of Eight”, the small group of congressional leaders who receive the most sensitive intelligence.

Lawmakers said little publicly afterward, but the mood was tense. Senator Chuck Schumer called the situation “serious” and said the administration must explain its case to the public. Representative Hakeem Jeffries said he still had “a lot of questions” about the military buildup, while Senator Mark Warner said the president needed to spell out U.S. objectives “very, very, very soon”. Representative Jim Himes, ranking member of the House Intelligence Committee, told reporters after the briefing, “I'm very concerned. Wars in the Middle East don't go well for presidents, for the country, and we have not heard articulated a single good reason for why now is the moment to launch another war in the Middle East.”

The briefing came as the White House tried to balance pressure and diplomacy. Officials repeated that President Donald Trump’s preferred option is a deal, while warning that “lethal force” remains on the table.

With talks expected in Geneva on Thursday, the administration is combining a visible military posture and selective public messaging as it approaches a fast-moving decision point.

Trump’s hard line on Iran in the State of the Union

President Trump had these things to say about Iran in his address last night:

“In a breakthrough operation last June, the United States military obliterated Iran’s nuclear weapons program with an attack on Iranian soil known as Operation Midnight Hammer.”

“For decades, it has been the policy of the United States never to allow Iran to obtain a nuclear weapon.”

“The regime and its murderous proxies have spread nothing but terrorism and death and hate.”

“They’ve already developed missiles that can threaten Europe and our bases overseas, and they’re working to build missiles that will soon reach the United States of America.”

“They want to make a deal, but we haven’t heard those secret words, ‘We will never have a nuclear weapon.’”

“My preference is to solve this problem through diplomacy.”

“I will never allow the world’s number one sponsor of terror [Iran] to have a nuclear weapon.”

Israel’s alliance-by-geometry moment

Israeli Prime Minister Benjamin Netanyahu used a cabinet meeting on Sunday, 22 February, to pitch what he called a “hexagon of alliances”, a loose grouping that would link Israel with India, Greece, and Cyprus, alongside unnamed Arab, African, and Asian states.

The point, he said, would be to align “like-minded” countries against what he described as two threats: a “radical Shia axis” and an “emerging radical Sunni axis”.

Israel’s prime minister is trying to turn diplomacy into geometry. Netanyahu says Israel is working to assemble a “hexagon of alliances” spanning India, parts of the eastern Mediterranean, and selected partners across the Arab world, Africa, and Asia. The goal, he argues, is to create a practical counterweight to rival “axes” in the region, and to bind technology and defense cooperation into something more durable than ad hoc coordination.

The timing is deliberate. Indian Prime Minister Narendra Modi arrived in Israel today for a two-day visit, with officials on both sides highlighting artificial intelligence and defense as priorities.

Modi is unlikely to sign up to any formal bloc, given New Delhi’s preference for strategic autonomy, but Netanyahu is clearly trying to frame deepening India–Israel ties as the anchor of a wider alignment. Regional tensions, including the risk of U.S.–Iran war, make that push more urgent, and more contentious.

Move fast and break things

The big picture in the U.S.

Growth appears to be cooling. The Bureau of Economic Analysis’s advance estimate put real GDP growth in the fourth quarter of 2025 at 1.4% (annualized), a sharp slowdown from the third quarter.

Consumers are a little less downbeat than a month ago, but the labor market mood is fraying. The Conference Board’s consumer confidence index rose to 91.2 in February, while the share saying jobs are “hard to get” climbed to 20.6%.

Spending looks softer heading into 2026. Retail sales were flat in December, with weakness in big-ticket categories.

Trade is back as a political-economic pressure point. The trade deficit widened sharply in December, and that the 2025 goods shortfall reached a record high.

Non-farm payrolls rose by 130,000 in January, and the unemployment rate was an accetable 4.3%. Gains were concentrated in health care (82,000), social assistance (42,000), and construction (33,000). Federal government employment fell by 34,000.

Wages and hours were steady. Average hourly earnings rose by 0.4% month on month and 3.7% year on year, and the average workweek edged up to 34.3 hours.

One technical detail matters politically. Benchmarking changes reduced the measured pace of job growth in 2025; the Bureau of Labor Statistics noted that 2025’s pace was revised down to 181,000. That revision will feed arguments about the “true” strength of the labor market.

Inflation is lower than it was, but not comfortably low. In January, CPI rose by 0.2% month on month (seasonally adjusted) and 2.4% year on year. Core CPI, excluding food and energy, rose by 0.3% month on month and 2.5% year on year.

The Federal Reserve held rates at 3.5% to 3.75% at its 27–28 January meeting.

Inside the Fed, the debate is hardening. Several officials apparently envisage a scenario in which rates might need to rise if inflation remains stubborn. If inflation re-accelerates, it could become an important part of the political campaign agenda.

Approval: a Reuters/Ipsos poll released on 24 February put President Donald Trump’s approval at around 40%. The same poll found that 61% of Americans think he is growing “erratic with age”, including 30% of Republicans.

Generic ballot: RealClearPolitics’ polling average showed Democrats on 47.2% and Republicans on 42.8% (Democrats +4.4) as of 24 February.

Party allegiances: Gallup reported a new high of 45% identifying as independents (published 12 January). That matters because persuasion and turnout are likely to matter more in 2026 than party-loyal mobilization alone.

A funding fight and partial shutdown dynamics. Department of Homeland Security funding lapsed on 14 February. This is politically potent because it combines immigration enforcement, public safety, and everyday disruption at airports, just as spring travel ramps up.

Immigration enforcement is becoming a congressional flashpoint. Senators have strongly questioned officials over the Alex Pretti shooting and use-of-force practices, broadening scrutiny of enforcement tactics.

A regulatory showdown is also brewing. D.C. Circuit judges are pressing the administration over efforts to effectively mothball the Consumer Financial Protection Bureau through mass firings, raising separation-of-powers questions that could spill into campaign arguments about consumer protection and the administrative state.

On jobs, the next Employment Situation report is scheduled for 6 March 2026. On inflation, the next CPI release is scheduled for 11 March 2026. And on ongoing shutdown negotiations, it’s important to consider that any DHS funding deal, or a widening of operational impacts, could move both polling and the broader “competence versus chaos” storyline quickly.

Pentagon tightens deadline in standoff with Anthropic

U.S. Secretary of Defense Pete Hegseth has given AI company Anthropic until Friday, 27 February 2026, to loosen or remove key “safeguards” that limit how its Claude models can be used for military purposes.

The Pentagon’s leverage is unusually direct. It has reportedly threatened to terminate Anthropic’s work and label the company a “supply-chain risk”. It has also explored using the Defense Production Act to compel access, or to force changes to Anthropic’s terms.

The dispute centers on scope. Anthropic is resisting broader military permissions, particularly uses that could enable autonomous targeting decisions (i.e. decisions to use lethal force without a human in the loop) or large-scale surveillance. The Pentagon argues it needs fewer restrictions for operational use, and that compliance should be governed by U.S. law and contract terms rather than by company policy.

The clash is intensifying as the Pentagon pushes to deploy frontier AI tools on classified networks and expand military usage. That is increasing pressure on firms whose “civilian” safety policies do not map neatly onto defense missions. Anthropic has more at stake than most, given a sizable Pentagon contract reportedly worth $200m.

Over the next 48–72 hours, the key questions are whether Anthropic refuses by 27 February and accepts the risk of termination or blacklisting, and whether the Defense Production Act threat turns into a concrete legal step, potentially triggering litigation.

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