In a show of growing military ties, Russian and Chinese strategic bombers flew a joint patrol over the Pacific Ocean on Wednesday that ended when the warplanes landed in each other’s airfields for the first time.

During an eight-hour mission, Russian Tu-95 “Bear” bombers and Chinese H-6K bombers flew over the Sea of Japan and the East China Sea in a flight path that triggered South Korea and Japan to scramble fighter jets in response.

The Russian defense ministry later issued a statement saying that no foreign airspace was violated during the flight and the bombers acted in accordance with the provisions of international law. China’s Defense Ministry described the patrols as a “routine” annual exercise between the two nation’s militaries.

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The bomber patrol is the latest example of strengthened defense collaboration between the two countries in recent years and follows a series of large-scale joint military drills this year as the pair face increased tensions with the United States over Russia’s war in Ukraine and China’s threats against Taiwan. A senior U.S. defense official told reporters Monday before the joint China-Russia bomber patrol took place that their shared military exercises are often “a means of signaling their closer alignment and sending a message to the U.S. and to other countries.”

But while Beijing and Moscow share aspirations to push the U.S. from its hegemonic role over world affairs, a formal alliance between the two nations will prove challenging to sustain.

Read More: U.S. Unveils Strategy for Nuclear Threats from China and Russia

Three weeks before Russia’s Feb. 24 invasion of Ukraine, Chinese President Xi Jinping and Russian President Vladimir Putin announced a deepening strategic alignment with one another in the coming years. In a lengthy Feb. 4 joint statement, they declared a “new era” of partnership in which cooperation would have “no limits” on a range of issues, including trade and defense.

Yet months later, some boundaries have become apparent. Unlike other world powers, China chooses not to condemn Russia’s blood-soaked military actions in Ukraine and has blamed the U.S. and its NATO allies for provoking Moscow into launching an assault on its smaller neighbor, while denouncing efforts to punish Russia through crippling economic sanctions. But China has failed to come to Russia’s aid in the war as Moscow struggles with diminishing weapon stocks. Meanwhile, the U.S. continues to funnel billions of dollars in aid to support Kyiv and has sent thousands of American troops into surrounding countries, principally in Poland, to deliver on-the-ground guidance to Ukrainian forces.

“China doesn’t provide Russia with any weapons for the Ukraine fight, despite Moscow’s pleas,” says Michael O’Hanlon, a military analyst at the Brookings Institution, a think tank in Washington. “We may make too much of the existing partnership and, as a result, so demonize them both that we push them together.”

In October, the Biden Administration unveiled a new defense strategy that puts the U.S. military on a Cold War-footing with both Russia and China, detailing a plan to confront two nuclear peer-adversaries for the first time in history with a multi-year build-up of modernized weaponry, enhanced foreign alliances, and a top-to bottom $1.2 trillion overhaul of the American nuclear arsenal. It characterizes China as a long-term “pacing challenge” with its growing power projection in the Pacific region, while deeming Russia to be an immediate “acute threat” amid its ongoing war with Ukraine.

Read More: Inside the $100 Billion Mission to Modernize America’s Aging Nuclear Missiles

China “still seems to see a lot of value in their partnership with Russia,” the senior defense official said. “Of course, it’s going to be an area of keen interest for us and other observers in Europe and elsewhere. We’ve seen (China) continue to support Russia diplomatically and to amplify a lot of their propaganda and disinformation. And so those are areas of particular concern.”

On Wednesday, the Pentagon released its “2022 China Military Power Report,” an annual assessment that found Beijing could have 1,500 nuclear warheads by 2035, up from its current 400, if they continue to expand their stockpile at the present pace. While the American stockpile now stands around 4,000 warheads, the U.S. is limited to 1,550 deployable weapons under a bilateral treaty known as New START with Russia. The landmark treaty, which the Biden Administration extended for five years with Putin, remains in force until February 2026.

A future President may choose not to renew the agreement or negotiate a follow-on. In that case, there could be a push—particularly from Republicans—to double the U.S. nuclear arsenal to match both Russia’s and China’s stockpiles, opening the door for an unprecedented arms race. It remains to be seen how united those two nations will stay going forward, but the prospect is one that Americans are increasingly concerned about, according to Pew Research. Although China and Russia still don’t have a formal military alliance, the evolving military exercises and joint patrols serve as a key way the two nations can strengthen bilateral defense ties.

Wall Street ended sharply higher on Wednesday after Federal Reserve Chair Jerome Powell said the central bank might scale back the pace of its interest rate hikes as soon as December.

The S&P 500 rallied from an earlier loss and the Nasdaq jumped after the release of Powell’s remarks prepared for delivery at the Brookings Institution think tank in Washington.

Powell also cautioned that the fight against inflation was far from over and that key questions remain unanswered, including how high rates will ultimately need to rise and for how long.

“(The market) has waited with bated breath, looking for that clarification in terms of duration and extent of Fed tightening. And anything that gives hope to the idea the Fed is becoming less hawkish is viewed as a positive for stocks, at least on a short-term basis,” said Chuck Carlson, Chief Executive Officer at Horizon Investment Services in Hammond, Indiana.

Bets that the Fed will reduce the size of its rate hikes, as well as recent data pointing to a mild cooling in inflation, led the benchmark S&P 500 index (.SPX) to its second straight month of gains.

The CME FedWatch Tool showed futures traders seeing a 75% chance that the Fed will raise interest rates by 50 basis points at its December meeting, up from a 65% chance before Powell’s comments were released. The FedWatch tool now shows a 25% chance of a 75 basis point increase.

Nvidia (NVDA.O) rallied more than 8%, Microsoft (MSFT.O) jumped 6.2% and Apple (AAPL.O) climbed 4.9%.

Tesla Inc’s (TSLA.O) shares surged 7.7% after China Merchants Bank International said Tesla’s sales in China in November were boosted by price cuts and incentives offered on its Model 3 and Model Y.

The S&P 500 climbed 3.09% to end the session at 4,079.97 points.

The Nasdaq gained 4.41% to 11,468.00 points, while Dow Jones Industrial Average rose 2.18% to 34,589.24 points.

The Philadelphia Semiconductor index (.SOX) surged 5.85%, trimming its loss in 2022 to about 28%.

Volume on U.S. exchanges was heavy, with 15.0 billion shares traded, compared to an average of 11.1 billion shares over the previous 20 sessions.

For November, the S&P 500 climbed 5.4%, the Dow added 5.7% and the Nasdaq increased 4.4%.

An ADP National Employment report showed private employment increased by 127,000 in November, below expectations of 200,000 jobs, suggesting demand for labor was cooling amid high interest rates.

“The ADP employment number not meeting expectations fits into the narrative that the Fed will have room and start slowing down its rate hikes, and that definitely benefits interest rate sensitive assets,” said Keith Buchanan, a portfolio manager at Globalt in Atlanta.

The Labor Department’s closely watched nonfarm payrolls data is due on Friday. A report showed U.S. job openings falling to 10.334 million in October, against 10.687 million in the prior month.

Another reading showed the U.S. economy rebounded more strongly than initially thought in the third quarter.

The S&P 500 remains down about 14% so far in 2022, while the Nasdaq index (.IXIC) has lost about 27%.

Biogen Inc (BIIB.O) jumped 4.7% after its experimental Alzheimer’s drug slowed cognitive decline in a closely watched trial.

Advancing issues outnumbered falling ones within the S&P 500 (.AD.SPX) by a 24.1-to-one ratio.

The S&P 500 posted 24 new highs and 1 new low; the Nasdaq recorded 117 new highs and 167 new lows.

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CAIRO (Reuters) -Islamic State (IS) militant leader Abu al-Hassan al-Hashemi al-Quraishi was killed in fighting, its spokesman said in an audio message posted on an affiliated Telegram channel, another heavy blow to a group that once struck fear across the Middle East.

IS has selected Abu al-Hussein al-Husseini al-Quraishi to as its new leader, the spokesman added. He said Abu al-Hassan al-Hashemi al-Quraishi was killed while “fighting enemies of God”, without elaborating.

No details about the new IS leader were given in the audio.

The spokesman urged Islamic State members in all countries to pledge allegiance to the new leader, adding that “he is one of the loyal sons of the (Islamic) state”.

“This doesn’t mean the group is finished, but for now it is a shadow of its former self, they are hollowed out in terms of their leadership and their ability to carry out attacks,” said Hassan Hassan, author of a book on Islamic State.

“They don’t have iconic, charismatic leaders any more, and they haven’t carried out any major attacks recently.”

The White House welcomed the news that Abu al-Hassan al-Hashemi al-Quraishi had been killed, National Security Council spokesman John Kirby told reporters.

“We’re still working our way through that,” Kirby said when asked about reports of the death.

Islamic State announced Abu al-Hassan al-Hashemi al-Quraishi as its new leader in March after the death of predecessor Abu Ibrahim al-Hashemi al-Quraishi.

The latter Quraishi was the brother of slain former IS caliph Abu Bakr al-Baghdadi, according to two Iraqi security officials and one Western security source.

Both Quraishi and Baghdadi died by blowing themselves and family members up during U.S. raids on their hideouts in northern Syria.

Islamic State emerged from the chaos of the civil war in neighbouring Iraq and took over vast swathes of Iraq and Syria in 2014. Baghdadi declared an Islamic caliphate from a mosque in the northern Iraqi city of Mosul that year and proclaimed himself caliph of all Muslims.

Islamic State’s brutal rule, during which it killed and executed thousands of people in the name of its narrow interpretation of Islam, came to an end in Mosul when Iraqi and international forces defeated the group there in 2017.

Since the peak of its power seven years ago, when it ruled millions of people in the Middle East and frightened the world with deadly bombings and shootings, Islamic State has slipped back into the shadows.

Its remaining thousands of militants have in recent years mostly hid out in remote hinterlands of fractured Iraq and Syria, though they are still capable of carrying out significant insurgent-style attacks.

A U.S. House of Representatives committee has obtained Donald Trump’s tax returns, following a years-long court fight with the Republican former president who accused the Democratic-led panel of being politically motivated, CNN reported on Wednesday.

The Ways and Means Committee, which had been seeking Trump’s tax returns spanning 2015 through 2020, will have little time to do its work, with Republicans poised to take the House majority in January.

The committee said it needs the documents, which it obtained following a Supreme Court decision clearing the release, to establish whether the Internal Revenue Service is properly auditing presidential returns and whether new legislation is needed.

Trump, who on Nov. 15 began his third consecutive run for the presidency, fought the committee tooth and nail to avoid releasing them.

He was the first president in four decades not to release his tax returns as he sought to keep secret the details of his wealth and the activities of his real estate company, the Trump Organization. It had long been customary, though not required, for major party presidential candidates to release their returns.

Trump, who served as president from 2017 to 2021, reported heavy losses from his business enterprises over several years to offset hundreds of millions of dollars in income, according to news media reporting and trial testimony about his finances. That allowed him to pay very little in taxes.

A major question hanging over the committee’s work is what will happen to the returns when Republicans take control of the House from the Democrats. The committee first requested Trump’s returns in 2019.

Democrats on the Senate Finance Committee, the counterpart to the Ways and Means Committee, were considering their options on any action relating to Trump’s tax returns, according to an aide who spoke on condition of anonymity. Democrats held their Senate majority in November’s midterm elections.

Success. That’s the potential outcome that the United States, Ukraine, allied and partner governments, and private-sector actors must now prepare to confront. Ukraine’s counteroffensives, backed by expanded and accelerated US and allied support, continue to push Russian forces out of Ukrainian territory, although at a reduced rate. These hard-won successes, however, bring with them possible challenges that also must be addressed. 

In the short term, there are fresh threats from Moscow—attacks on electricity, water, and heat as winter approaches, sham annexations of occupied territories, mobilizations of new troops, reduced but persistent nuclear risk, and Russian prisoners to manage. Areas that Ukraine has liberated from Russian forces need immediate governance, cleanup, humanitarian assistance, and economic revival. Over the longer term, Ukraine will have to rebuild destroyed infrastructure; institute the economic and political reforms required for European Union (EU) membership; and be capable of ensuring its security. 

How exactly to meet these looming challenges while exploiting present and future opportunities?

It is, of course, up to the Ukrainians to determine their priorities and their supporters to assist as much as possible, which is also consistent with US interests. But what’s urgently needed is a four-front, long-haul strategy for helping Ukraine win the war against Russia and the peace that follows—one built to withstand the dramatic developments that are sure to play out over the coming years, not just over the next weeks and months of this rapidly evolving conflict.

Building on a Strategy Consortium meeting with leading experts on Ukraine and Russia, we have developed just such a strategy. Among our top recommendations in the military, economic, political, and diplomatic domains are the following:

• The United States needs to make explicit that it supports Ukrainian victory and Russian defeat in terms of the Kremlin’s strategic goal of destroying the Ukrainian nation and Ukrainian identity.
• Washington should not be self-deterred by Russian nuclear threats.
• The United States and its allies and partners should confiscate the currency reserves of the Central Bank of Russia, which are currently frozen in the West, and transfer these reserves to the Ukrainian government, with appropriate oversight, as needed for budget support, with the balance used for fast recovery, cleanup, and the rebuilding of infrastructure.
• In meetings with their Ukrainian contacts, senior Western officials should raise issues related to political and economic reform alongside urgent war-related matters. But to ensure that Ukraine can maintain its war effort, at a time when it risks losing up to 35 percent of its gross domestic product (GDP) this year, economic assistance as a whole cannot be conditioned on political reform at this point.
• The most important step Ukraine and the West can take to contribute to diplomacy is to support Ukraine’s war effort with military equipment, training, and economic support.

Below is our proposed strategy in full.

Military recommendations

The United States needs to make explicit that it supports Ukrainian victory and Russian defeat in terms of the Kremlin’s strategic goal of destroying the Ukrainian nation and Ukrainian identity. It should commit to helping the Ukrainian people achieve a democratic, independent, sovereign, prosperous Ukraine that has the means to deter and defend itself against any future Russian aggression.

The United States, NATO allies, and other key partners need to plainly articulate a strategic narrative and rationale for that goal. This narrative might take the following form:

• Without a shred of justification, Vladimir Putin ordered a new attack on Ukraine, a peaceful, sovereign nation that, like the Russian Federation, has been independent for thirty years. Putin’s aggression represents a clear and present danger to US and European security and prosperity. As Putin has made clear, a Russian victory would put NATO allies at severe, unacceptable risk. Moreover, Putin’s aggression is a campaign with genocidal features aimed at erasing a sovereign Ukraine from the map and eradicating Ukrainians’ cultural and national identity. If Russia prevails, other nations in the region, including NATO allies, could be next. The Ukrainians are justly defending their sovereignty, freedom, and independence, as well as principles enshrined in the Charter of the United Nations and the Helsinki Final Act including that borders may not be changed by force. It is in the interests of the United States, NATO, and other partners to support Ukraine in defending its right to exist and to help the Ukrainians defeat Russian aggression and thwart Putin’s revisionism. It is also in their interest to reestablish the principles of respect for national sovereignty, territorial integrity, and internationally recognized borders—principles that are widely embraced throughout the world as critical to international peace and security. 

Given the great risk to US security and prosperity if the Kremlin wins in Ukraine, it is essential for the president, other senior administration officials and congressional leaders in both parties to explain clearly and regularly to the American people why it is in the US interest to provide ongoing, substantial assistance to Ukraine.

The Ukrainians have demonstrated skill and competence in defending their nation. They know best how, when, and where to defeat the Russians, including what weapons are needed to do it faster and with less loss of life. While the United States should consult with Ukrainian officials on the issue, it is the Ukrainians who will have to decide and execute any military operations. The US and allied role is to continue to provide and accelerate military support for the overall Ukrainian campaign plan.  

The United States and NATO allies should provide the amount and kind of military support the Ukrainians require, short of deploying NATO forces to Ukraine. This is even more important now as Putin mobilizes new forces and in the process spurs unrest in Russia. The Ukrainians are justified in using their weapons, including those received from Western partners, to attack any Russian forces that attack them wherever those attacking Russian forces are located. The United States and NATO should get the requested weapons to Ukraine faster to enable a successful counteroffensive, especially as the Kremlin rushes new conscripts to the battlefield. Russia should be left in no doubt that the use of weapons of mass destruction, or any form of attack on NATO members, would have catastrophic consequences. The United States and NATO should be prepared to respond to such use or such an attack accordingly. That policy should be publicly announced, and the United States and NATO should quietly move conventional and nuclear weapons systems into position to be prepared to execute that policy, taking into account the scale and nature of the Russian attack. The United States must recognize that it is far easier for Putin to threaten nuclear war than to initiate it. Therefore, Washington should not be self-deterred by Russian nuclear threats. 

This is an immediate issue as the Kremlin-run sham referenda in four areas of Ukraine that it does not fully control have yielded the expected putative results in favor of joining Russia. At the same time, Moscow is stating that it will use all its capabilities, including nuclear weapons, to defend the “motherland” and intimating that this would now apply to these territories. Moscow’s purpose is to deter Ukraine (with US support) from extending its counteroffensive to those parts of Ukraine currently under Russian control. As the United States has not discouraged Ukraine from conducting operations against targets in Crimea, it should not discourage Kyiv from operations designed to regain control over any Ukrainian territories Russia now purports to annex in the east and the south. The United States should also reiterate the excellent warnings conveyed publicly by President Joe Biden on 60 Minutes and at the United Nations against Moscow’s use of weapons of mass destruction in Ukraine.  

In managing and treating Russian prisoners of war (POW) and conducting war-crimes trials, Ukraine must continue to adhere to the Geneva Convention. We recommend the United States and NATO assist Ukraine in establishing a civil-military board to oversee POW camps and treatment regimes. Ukraine should also seek, accept, and facilitate Red Cross and Organization for Security and Co-operation in Europe (OSCE) observation and assistance. The United States, Ukraine, and other partners should demand that Russia’s treatment of POWs adhere to the Geneva Convention and that Russia provide Red Cross and OSCE access to them.

Economic recommendations

With its GDP projected to decrease by up to 35 percent this year, Ukraine needs dramatically increased budgetary and economic support to keep its economy afloat as it defends itself against the Russian invasion. The most urgent need is for monthly budget support, which the United States has provided, but the EU has not fully delivered. Since the United States is providing the preponderance of the military support (although the Europeans should do much more), it is only fair to ask that Europe provide the preponderance of the economic support, which will help ensure sustained US public and congressional support for Ukraine. This section outlines urgent and medium-term recommendations for policymakers. 

The United States, the European Union, and their allies and partners should focus on addressing Ukraine’s monthly budget deficit challenge to enable Kyiv to sustain the war effort. The United States needs to exhort the EU to deliver on its budget support. Ukraine is running a nonmilitary budget deficit of $5 billion per month. The United States gives $2.5 billion a month through a World Bank trust fund, while the EU disbursement to this point falls short of its total commitment of $10.2 billion.

Furthermore, the United States needs to continue to focus on grants to Ukraine, not loans, and urge European governments and international financial institutions to do the same. Before the war, Ukraine had a public debt of 50 percent of GDP; with a falling GDP and exchange rate, the country’s rising public debt is expected to reach 95 percent of GDP at the end of this year. This is untenable and will require debt restructuring. Therefore, Ukraine needs grants, which the United States gives, and not loans, which is what the EU and international financial institutions (IFIs) currently give.

The United States, the EU, and their allies and partners should increase sanctions on Russia to include all Russian banks and oligarchs. At the same time, they should confiscate the currency reserves of the Central Bank of Russia currently held and frozen in the West. They should transfer these reserves to the Ukrainian government with appropriate oversight, as needed for budget support, with the balance used for fast recovery/cleanup and rebuilding of infrastructure. The currency reserves held and frozen in the West amounted to $316 billion as of January 1, according to the Central Bank of Russia. Germany held $96 billion, France $61 billion, Japan $57 billion, the United States $39 billion, the United Kingdom $31 billion, Canada $17 billion, and Austria $15 billion.

The United States should work with the aforementioned countries (including through the EU and Group of Seven) to pass national legislation that would enable confiscation and transfer of these funds to the government of Ukraine. Canada has already legislated confiscation of Russian assets. Central bank reserves, not oligarch assets, are initially the right target. These funds are liquid, and they involve the least amount of administrative and legal work. Work should then be undertaken on whether and how to reach oligarch assets and transfer them to the Ukrainian government for similar purposes. 

The United States and EU should advocate for as large of an International Monetary Fund aid package for Ukraine as possible. Ukraine has already begun discussions with the IMF.

The United States and the EU should provide humanitarian assistance to help Ukrainians get through this winter, including support for rapid repairs of critical energy, water, and heating systems. Having lost the initiative on the battlefield, Russia is targeting Ukraine’s civilian infrastructure ahead of the winter. The United States and the EU should give Ukrainians humanitarian support to stay warm through the winter and to protect and quickly fix damaged infrastructure.

There is a need to address the energy crisis in Europe and to help ensure Europe is prepared for winter. The United States should encourage Germany to extend the life of its last three nuclear reactors for at least another year. The United States should also speed up its permitting process to allow the number of liquefied natural gas terminals in the United States to expand and bring more terminals online. Appropriate US officials should consult closely and frequently with European counterparts to help them think through the problem, offer innovative suggestions as to how energy can be managed more efficiently and effectively, and extend whatever other assistance the United States can provide. The US effort in Ukraine has a lot riding on the European energy issue if solidarity with European allies is to be maintained. 

The United States and EU should encourage their business communities and universities to offer job training and vocational education to Ukrainians. There is an acute need for job training to support the unemployed and internally displaced persons within Ukraine. More vocational training could help the unemployed find jobs in the near term and restart the Ukrainian economy. 

Political recommendations

The priority task in Ukraine right now is to defeat the major conventional attack Putin launched in February. Ultimately, promoting political and economic reform remains critical to Ukraine’s future, but it is currently a secondary priority to defeating Putin’s war aims. That said, the United States and its allies and partners must still keep reform on the agenda in Ukraine. Without attention to these matters, Ukraine risks winning the war and losing the peace. Ukraine needs to defeat Russian aggression as a priority. But the United States and its allies and partners should build upon the prospects for Ukraine’s EU accession and the growing intolerance within Ukrainian society for corruption to set the stage for major reform, especially as the country begins to rebuild after the war. To this end, we put forth the following recommendations:

While Ukraine and supportive governments are properly directing most of their attention to the war, senior Western officials should nonetheless periodically raise political and economic reform issues alongside urgent war-related matters in meetings with their Ukrainian contacts; however, to ensure that Ukraine can maintain its war effort at a time when it risks losing up to 35 percent of its GDP this year, economic assistance as a whole should not be conditioned on reform. If, notwithstanding, donors do decide to impose conditions on such assistance, they should all use the seven EU accession criteria, five of which pertain to governance and anti-corruption actions.

The West is providing enormous resources to Ukraine, which has offered to accept any tracking mechanism that its donors request. To ensure that the aid they provide is being used properly, the United States and its allies and partners should set up an appropriate system for the various assistance streams and do so in ways that are as simple and impose as little administrative burden on the Ukrainians as possible. The establishment of such a tracking mechanism could help manage criticism in donor countries that aid to Ukraine will be lost to corruption; on the military side, it could also help get equipment to the front faster.

As a priority matter on any reform agenda, the United States, the EU, and IFIs should support the appointment of reformers to key positions in Ukraine’s justice sector: the various prosecutorial agencies and the courts. They should also carefully monitor the state of play with media in Ukraine. Since the war began, all the major television stations have been combined into one station overseen by the government, advertising revenues have dried up, making it more difficult for independent media to stay afloat, and Rada TV (the Ukrainian equivalent of C-SPAN) was recently taken off air. The objective of US, EU, and IFI efforts should be to ensure that Ukrainians have access to free media and a plurality of voices.

Diplomatic recommendations

The most important step Ukraine and the West can take to contribute to diplomacy is to support Ukraine’s war effort militarily and economically. Moscow is only likely to negotiate in earnest if it faces defeat on the battlefield. Postwar diplomatic settlements often reflect the balance of power on the ground. 

Ukrainian President Volodymyr Zelenskyy and the West should reject Russian cease-fire proposals that would lock in Russian territorial gains. Under Putin’s leadership, Russia has never returned conquered territory to its original, legal jurisdictions. A “frozen” conflict will be used as a means of further destabilization of Ukraine and preparation for a new conflict when the time is right. When it is agreed, a cease-fire should be unconditional and not made contingent on sanctions relief. Once sanctions against Russia are removed, it is most unlikely that they will be restored. Sanctions should not be lifted until Russian forces withdraw from Ukraine’s territory and Russia pays compensation for the damage caused by its invasion. The United States and its allies and partners should maintain a strictly enforced export control regime on Russia to deny it the things it needs to maintain its military effort. All should be steadfast in opposing the allure of what would be an unrealistic and short-lived peace. 

Any postwar settlement should include clear security guarantees for Ukraine. Ukraine must be able to deter Russia in order to prevent a recurrence of the war. These security guarantees could take a few different forms:

• NATO membership should be the goal, but it may be hard to achieve unanimous support in the alliance for Ukraine’s accession in the near term. Still, the prospect of membership should remain on the agenda for consideration at a more favorable moment. Ukraine’s demonstrated military prowess makes clear that the country would enhance NATO’s defense capacity. 
• In the interim, as part of a settlement to the conflict, powerful countries with an interest in Ukraine’s sovereignty and independence, such as the United States, the United Kingdom, Poland, and others should promise some form of bilateral security guarantees. 
• As the Biden administration’s actions suggest, Washington and the West should pursue a US-Israeli model, whereby the United States and other Western powers provide a sufficient quality and quantity of military and financial aid to ensure that Ukraine is able to build a military force capable of deterring and, if deterrence fails, defeating a further Russian invasion.

The West also should work to embed Ukraine more closely in other multilateral institutions, including eventual EU membership. Furthermore, NATO should consider ways to continue to enhance its partnership with Ukraine, even if Kyiv does not immediately become a full member of the alliance.

Stephen J. Hadley is a principal of Rice, Hadley, Gates & Manuel LLC, the chairman of the Atlantic Council’s International Advisory Board and an executive vice chair of its Board of Directors, a member of the United States Institute of Peace’s Board of Directors, and the former national security advisor to the president of the United States from 2005 to 2009.

William Taylor is a vice president for Russia and Europe at the US Institute of Peace, a former US ambassador to Ukraine from 2006 to 2009, and a former chargé d’affaires at the US embassy in Kyiv in 2019.

John E. Herbst is the senior director of the Atlantic Council’s Eurasia Center and a former US ambassador to Ukraine from 2003 to 2006.

Matthew Kroenig is the acting director of the Atlantic Council’s Scowcroft Center for Strategy and Security, a professor of government and foreign service at Georgetown University, and a former US. Intelligence and Defense Department official.

Melinda Haring is the deputy director of the Atlantic Council’s Eurasia Center.

Jeffrey Cimmino is an associate director of the Scowcroft Strategy Initiative within the Atlantic Council’s Scowcroft Center for Strategy and Security.

This strategy paper benefited from the insights of workshop participants, including Philip Breedlove, Paula Dobriansky, Anatoliy Grytsenko, Mark Hertling, David Kramer, Joseph Nye, Barry Pavel, Stephen Sestanovich, James Sherr, Alexander Vershbow, and Masha Yovanovitch. These participants support the general thrust of the paper, though not necessarily every recommendation.

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Eli Lilly and Co’s COVID-19 drug bebtelovimab is not currently authorized for emergency use in the United States, the Food and Drug Administration said, citing it is not expected to neutralize the dominant BQ.1 and BQ.1.1 subvariants of Omicron.

Wednesday’s announcement takes away authorization from the last COVID-19 monoclonal antibody treatment, leaving Pfizer Inc’s (PFE.N) antiviral drug Paxlovid, Merck’s (MRK.N) Lagevrio and Gilead Sciences’ (GILD.O) Veklury as treatments for the disease, besides convalescent plasma for some patients.

AstraZeneca Plc’s monoclonal antibody Evusheld is also authorized for protection against COVID-19 infection in some people.

Eli Lilly and its authorized distributors have paused commercial distribution of the monoclonal antibody until further notice from the agency, while the U.S. government has also paused fulfillment of any pending requests under its scheme to help uninsured and underinsured Americans access the drug.

The drug, which was discovered by Abcellera (ABCL.O) and commercialized by Eli Lilly, received an authorization from the FDA in February.

BQ.1 and BQ.1.1 have become the dominant strains in the United States after a steady increase in prevalence over the last two months, surpassing Omicron’s BA.5 sub-variant, which had driven cases earlier in the year.

The subvariants accounted for around 57% of the cases nationally, as per government data last week.

Wall Street equities rose on Wednesday while U.S. Treasury yields pared gains and the dollar lost ground after Federal Reserve Chair Jerome Powell said the central bank could slow the pace of interest rate hikes “as soon as December”, even as he cautioned that inflation was still too high.

His words appeared to soothe investors who were fearing a more hawkish statement even as Powell warned that the fight against inflation was far from over and that key questions remain unanswered, including how high rates will ultimately need to rise and for how long.

“The market is taking this glass-half-full, it could’ve been worse approach. Powell didn’t really say anything that new,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute in Charlotte, North Carolina.

“The path of least resistance since the last inflation number has been higher. There’s momentum to the upside in place until something outright stops it,” said Samana.

“Policy continues to tighten. People are just not appreciating it,” he added, noting that even if the Fed were to pause rate hikes it is still shrinking the balance sheet which he sees as “almost as important if not more important than the level of rates.”

The Dow Jones Industrial Average (.DJI) rose 210.82 points, or 0.62%, to 34,063.35, the S&P 500 (.SPX) gained 48.55 points, or 1.23%, to 4,006.18 and the Nasdaq Composite (.IXIC) added 228.54 points, or 2.08%, to 11,212.32.

MSCI’s gauge of stocks across the globe (.MIWD00000PUS) gained 1.19%. Emerging market stocks (.MSCIEF) rose 2.06%.

In Treasuries, Benchmark 10-year notes were down 3.9 basis points to 3.709%, from 3.748% late on Monday. The 30-year bond was last down 1.1 basis points to yield 3.7912%, from 3.802%. The 2-year note was last down 4.5 basis points to yield 4.4277%, from 4.473%.

In currencies, the dollar index fell 0.533%, with the euro up 0.46% to $1.0374.

The Japanese yen strengthened 0.35% versus the greenback at 138.23 per dollar, while sterling was last trading at $1.2011, up 0.49% on the day.

Oil prices were rallying on Wednesday on signs of tighter supply, a weaker dollar and optimism about a potential recovery of demand in China.

U.S. crude rose 3.04% to $80.58 per barrel and Brent was at $85.41, up 2.87% on the day.

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Singer-songwriter Christine McVie, a member of British-American band Fleetwood Mac, died on Wednesday aged 79, her family said in a statement posted on her official Facebook page.

Fleetwood Mac, whose name was inspired by the surnames of its founders – bassist John McVie and drummer Mick Fleetwood – formed in 1967 but had many members come and go over the years.

Born Christine Perfect in northwest England on July 12, 1943, she joined the band as a singer and pianist in 1970 after marrying John following a courtship of two weeks. She ultimately left him to live with a lighting technician.

The band’s 1977 album “Rumours”, which sold more than 40 million copies and is one of the best-selling albums of all time, was recorded as the couple were divorcing.

McVie’s family said she died peacefully in hospital on Wednesday after a short illness.

“We would like everyone to keep Christine in their hearts and remember the life of an incredible human being, and revered musician who was loved universally,” the statement said.

In a statement posted on Twitter, Fleetwood Mac said she was “truly one-of-a-kind, special and talented beyond measure”.

“She was the best musician anyone could have in their band and the best friend anyone could have in their life. We were so lucky to have a life with her,” the band said. “She will be so very missed.”

U.S. firms flashed mixed signals on the strength of the economy, inflation and labor demand in the month and a half before the Thanksgiving holiday and were more downbeat about the outlook, a Federal Reserve report showed on Wednesday, as the central bank struggles to bring down inflation without causing a recession.

The Fed released its snapshot on the economy’s health, based on information from business contacts nationwide, as it prepares to slow the pace of interest rate hikes at its Dec. 13-14 policy meeting, with an eye to reaching a sufficiently high enough level to pause in the first half of 2023.

The U.S. central bank has driven up borrowing costs this year at the fastest pace since the early 1980s in a bid to dampen demand across the economy and, in turn, quash inflation that has been running at 40-year highs.

“Interest rates and inflation continued to weigh on activity, and many contacts expressed greater uncertainty or increased pessimism concerning the outlook,” the Fed said in its survey, known as the “Beige Book,” which was conducted across its 12 districts from mid-October through Nov. 23.

Economic activity posted modest gains in half of the central bank’s districts, while in the other half it remained flat or showed slight-to-modest declines.

Fed Chair Jerome Powell earlier on Wednesday said the fight with inflation was far from over and that key questions remain unanswered, including how high rates will ultimately need to rise and for how long. A much-anticipated monthly measure of inflation is due to be released on Thursday.

Fed officials have been encouraged by recent data on price pressures for inputs and labor, which have provided glimmers of hope that inflation is slowing and may continue to do so. Nevertheless, the Fed’s preferred measure shows inflation remains at a rate more than three times the central bank’s 2% goal and shows no sign of waning quickly.

“Consumer prices rose at a moderate or strong pace in most districts,” the Fed noted in regards to price pressures even as firms reported the speed of the increases slowed on balance. “Inflation was expected to hold steady or moderate further moving forward,” the survey said.

There was a similarly mixed picture on the labor front where “hiring and retention difficulties eased further, although labor markets were still described as tight,” the Fed’s report said. Wage pressures increased at a moderate pace, although a few districts reported some easing, it said.

The Cleveland Fed district, for example, displayed the weakening in activity the central bank has hoped for but not yet the moderation in labor demand it also needs for it to feel confident in holding rates steady soon with the confidence that inflation will return to target.

“Business activity slowed modestly in recent weeks,” the Fed said. “Still, firms continued adding to their payrolls, and stiff competition for workers kept upward pressure on wages. Input cost increases remained widespread.”

That tallies with government data released earlier on Wednesday that showed job openings decreased in October but remained significantly high despite the Fed’s aggressive efforts to tighten financial conditions. A separate government report showed the U.S. economy rebounded more strongly than initially thought in the third quarter.

The central bank’s benchmark overnight lending rate currently sits in a target range of 3.75% to 4.00%. Investors overwhelmingly expect the Fed to raise that rate by half a percentage point at next month’s meeting.

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