Houthi PM and cabinet killed, RFK Jr. fires CDC director, Trump fires Federal Reserve Governor, $200M pro-AI lobbying group launched || Global Risks Weekly Roundup #35/2025.

43% probability that the Houthis will sink at least one ship between now and the end of September.

Nuño Sempere, belikewater, Tolga Bilge, and Vidur Kapur

Sep 01, 2025

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Executive summary

Geopolitics

Middle East

Gaza: News media continue capturing famine deaths; four, eight, ten. The Gaza Health Ministry also claimed that 289 famine deaths had occurred, but this number is much higher than other reports, and could potentially even have been chosen to make it appear that a threshold of 2 deaths for every 10K people in a few regions of Gaza had been met, which is required for the a famine declaration..

The US refused to allow delegates from the State of Palestine, including President Mahmoud Abbas, to attend the UN General Assembly in New York. Palestine is recognized as a State by 147 of 193 UN members and is listed as a “non-member Permanent Observer State.” And, Trump held a Gaza policy meeting with Tony Blair and Jared Kushner.

As Israeli tanks rolled towards Gaza City, Israel declared Gaza City a “dangerous combat zone” and ended a tactical ceasefire. A media investigation of an Israeli army database suggests that at least 83% of Gaza dead were civilians.

Iran: The UK, France and Germany are moving to reimpose snapback sanctions from the 2015 deal on Iran within 30 days. The IAEA says that, “satellite imagery shows no evidence that near-bomb grade uranium has been moved from Iran’s Isfahan site since a US attack two months ago”, per Bloomberg. Australia accused Iran of orchestrating two antisemitic arson attacks.

Afghanistan is facing a severe health crisis as its healthcare system is on the verge of collapse because of a lack of funds. The country also experienced a magnitude 6.0 earthquake. Initial reports estimate that at least 800 people were killed and more than 2,500 injured.

Yemen: The Houthi prime minister and several cabinet members were killed in an Israeli strike. Houthi leader Abdul-Malik al-Houthi is not thought to have been killed or wounded. The Houthis subsequently detained 11 UN staff and launched a retaliatory missile strike against an Israeli-owned tanker in the Red Sea, although the missile strike appears to have missed its target (despite Houthi claims to the contrary).

Forecasters estimate a 43% probability (30% to 62%) that the Houthis will sink at least one ship in the Gulf of Aden or the Red Sea between now and the end of September. They are departing from the historical frequency of 18% (4 in the last 22 months) because the recent Israeli attacks were the highest-profile attacks on the Houthis since they came to power, they have vowed to retaliate, and they have already launched a missile strike. Still, even if they continue to try, they may not succeed.

Europe

Russia: Parts of Russia are experiencing gasoline shortages after Ukraine struck refineries. There has been an unusual amount of submarine monitoring activity by NATO countries in the Norwegian Sea around the aircraft carrier USS Gerald R. Ford, potentially looking for one or more Russian submarines. Roscosmos, the Russian State Corporation for Space Activities, is on the verge of bankruptcy. Russian strikes hit UK and EU offices in Kyiv.

Ukraine will now allow young men to leave the country.

EU: European Commission president von der Leyen plans to take a 7-country tour of the Russian border to promote an EU defense buildup. Yesterday, as she flew to Bulgaria, her plane’s GPS was jammed; the plane landed safely. Bulgarian authorities blamed Russia for the interference.

United States

A banner of Trump was hung on the face of the Department of Labor building. And, in a meeting with Trump, cabinet members sycophantically praised Trump’s leadership; last week, we pointed out that a lack of independent advice increases the risk of mistakes.

US Secretary of Commerce Lutnick said that the US is interested in obtaining partial ownership stakes in defense contractors, including Palantir, Lockheed Martin and Boeing. Lutnick also said that the US should share in university patents for inventions funded by the government.

Director of National Intelligence Gabbard fired the CIA’s top Russia expert and “appears to have identified a CIA officer who was operating under cover.”

The chief data officer of the Social Security Administration filed a whistleblower report claiming that DOGE copied an entire Social Security database, with the private information and Social Security numbers of hundreds of millions of people, to an insecure cloud server in June.

After firing more than 100 immigration judges, the Department of Justice is hiring temporary immigration judges, and no longer requires them to have experience in immigration law.

Trump issued an executive order to prosecute desecrating the American flag. The Supreme Court has already ruled that desecrating the flag is legal and is “a form of free speech protected by the First Amendment.” Forecasters considered the possibility that this was meant to incite flag burnings in response: ultimately legal, but with terrible optics for Trump’s opponents.

And: The Trump administration took management of Union Station away from Amtrak and placed it under federal control. Trump cancelled $5B in foreign aid. Nearly 200 staff, including many senior leaders, have quit the Nuclear Regulatory Commission, raising safety concerns. The Trump administration intends to deport Kilmar Abrego Garcia to Uganda, but a judge temporarily blocked deporting Mr. Garcia “to Uganda or any other country,” pending his trial.

The Rest of the Americas

Venezuela: The standoff between the US and Venezuela continues. Venezuela deployed warships and drones near US ships and sent 15K troops to the border. A retired US admiral commented that if Maduro sends either to confront US Navy warships, he is “playing with fire”. An additional ship also headed to Venezuela. On the other hand, The Guardian interviews some experts who make the case that their spat may mostly be for show.

In Argentina, corruption allegations are causing turbulence in financial markets.

In Mexico, Senators came to physical blows over whether to involve the US militarily in operations against drug cartels.

Denmark summoned the top US diplomat in Greenland because of allegations that several US citizens were conducting “covert influence operations” in Greenland.

Haiti: Violence continues to escalate.

Asia

After India released water from overflowing dams, Pakistan evacuated thousands out of harm’s way. Nearly 190,000 people were moved out of flood-affected areas in Punjab.

After regime change in Bangladesh last year, the country continues to be unstable and tense. Islamist mobilization is rising, with Muslims threatening Hindus and pushing for Islamic statehood. Bangladesh also has not held an election in the year since the previous prime minister was ousted.

North Korea: Kim Jong Un will attend a Chinese military parade with Putin and Pezeshkian. He also supervised a test of anti-air missiles.

China warned the Philippines that there will be a “price to pay” after a top Taiwanese diplomat reportedly visited the country.

Africa

Sudan: At least 600K have been displaced from the city of El-Fasher and surrounding camps amid an RSF siege. UNICEF reports that children in El-Fasher are “starving” after 500 days of siege.

The Democratic Republic of Congo (DRC) and M23 rebels resumed talks in Qatar after violence resurged in the eastern DRC.

Nigeria: The Nigerian air force killed dozens of militants near the Cameroon border amid a rising insurgency. Military airstrikes freed 76 hostages, including children and kidnapping victims. In Nigeria, at least 4.7K people were kidnapped between July 2024 and June 2025.

Economy

Trump attempted to fire Federal Reserve Governor Lisa Cook over inaccurate statements she made on mortgage applications; there appear to have been even more irregularities in her real estate filings than initially reported. Cook is now suing for wrongful termination, and the case may end up in the Supreme Court. If Cook is removed from the Fed Board of Governors, then that will create an opportunity for the Trump administration to replace her with someone potentially more responsive to the administration’s wishes. Thus, Trump’s attempt to fire Cook raises the prospect that the administration aims to reduce the Fed’s independence – and that can be expected to have long-term effects on bond markets. Some, on both sides of the aisle, have been calling for reform at the Fed.

US VP Vance favors substantial executive control over the Fed as well. In an interview, he stated that, “I don't think that we allow bureaucrats to sit from on high and make decisions about monetary policy and interest rates without any input from the people that were elected to serve the American people… I feel very strongly that the president of the United States is much better able to make these determinations.”

Japan’s 30-year treasury yield reached an all-time high last week, after Trump tried to fire US Fed Governor Lisa Cook, raising the prospect of a more compliant Fed Board of Governors that is less concerned with keeping inflation in check. A shake-up at the Fed would raise risks associated with holding US Treasuries and increase long-term Treasury yields, as the Fed would be expected to prioritize optimizing the labor market over limiting inflation – and those prospects raise yields on Japanese bonds to compete for investment funds.

Tariffs: The Trump administration is pressuring Europe to step up sanctions against Russia, including a complete halt to oil and gas purchases, as well as to impose secondary tariffs on countries like India that purchase Russian oil. In the meantime, the administration is again claiming that Trump will step back from diplomatic efforts because of frustration with the lack of progress. Trump also threatened to impose a 200% tariff on China if they don’t give the US “magnets”, i.e., if China doesn’t lift restrictions on the export of rare earth magnets to the US. But an appeals court judge panel invalidated most of Trump’s tariffs, although enforcement is delayed until October 14th, unless the Supreme Court agrees to take the case, in which case enforcement will be delayed further2.

Forecasters estimate a 42% (30% to 60%) chance that the Supreme Court upholds at least 75% of Trump’s tariffs (by dollar value expected to be collected) by the end of May, 2026. Some of our forecasters point out that the decision is political and that the Supreme Court could argue the case both ways, and that the court might want to avoid a big fight with Trump. Others think that the Constitution is clearer, but that the Supreme Court could also sidestep the issue temporarily, effectively allowing Trump administration tariffs to continue, by deciding not to take up the case in the near future.

A 50% tariff rate went into effect on Indian goods and is expected to have devastating impacts on some export industries, including textiles, and have lesser impacts on others, including pharmaceuticals. The Trump administration threatened to increase tariffs and impose export restrictions on countries that tax or regulate US tech firms.

North Korea’s economy grew 3.7% in 2024, the fastest annual pace of growth in eight years, because of expanding economic and military ties with Russia.

And: Because of tariffs, US aluminum prices are about 50% higher in the US than in Europe and Japan, hurting US manufacturing. An FT analysis cautions that populist economies often end up with lower GDP and unsustainable debt. Entry-level job openings for software developers are disappearing rapidly, presumably thanks to AI.

Artificial Intelligence

Anthropic warned that its frontier model, Claude, had been used to carry out “sophisticated cyberattacks” in the real world. The company said that it was able to disrupt the threat actors and report them to the authorities. AI tools could be used to detect malicious actors who might otherwise have remained hidden, as well as enable them, although the detection part will grow more difficult as open-source capabilities rise.

Key points Anthropic says their report shows:

Agentic AI has been weaponized. AI models are now being used to perform sophisticated cyberattacks, not just advise on how to carry them out.
AI has lowered the barriers to sophisticated cybercrime. Criminals with few technical skills are using AI to conduct complex operations, such as developing ransomware, that would previously have required years of training.
Cybercriminals and fraudsters have embedded AI throughout all stages of their operations. This includes profiling victims, analyzing stolen data, stealing credit card information, and creating false identities allowing fraud operations to expand their reach to more potential targets.

Forecasters estimate that there is a 44% probability (range, 37% to 50%) of an AI-assisted cyberattack that causes at least $1B in damages in the US in Q4. The historical frequency of such attacks depends on judgment calls, for instance on whether specific attacks on the government reached that threshold. But forecasters agree that the likelihood of such attacks has increased, and that AI is likely to play at least some role in most future attacks.

A new super PAC, with $200 million in funds, was started to promote AI and oppose regulation. Funders include a16z (Andreessen Horowitz) and OpenAI’s president Greg Brockman.

China aims to triple the production of AI chips to facilitate the development of Chinese AI models. Alibaba has developed its own AI chip.

Researchers found that AI might already be significantly impacting the jobs market, particularly for early career-stage software engineers and customer service representatives.

ChatGPT appears to have encouraged and provided instructions to a 16 year old boy to commit suicide. OpenAI misleadingly spun it.

OpenAI and Anthropic evaluated each other’s models. During these evaluations, ChatGPT offered bomb recipes. This evaluation approach was generally welcomed by AI safety experts: it’s better to mark your competitor’s homework than your own homework.

Google says that one of its AI systems discovered a zero-day vulnerability in Google Chrome, and the company issued an urgent update to the browser. This illustrates that AI can be used for defence as well as offence in the domain of cybersecurity.

Anthropic settled a copyright lawsuit, which, if it had gone to trial, posed a small chance of causing the company to go under. We previously estimated a 68% chance that the lawsuit would go to trial, and a 56% chance that penalties would be at least $1.5B if so, so we missed this somewhat.

And: 300k semi-private Grok chats were indexed by Google and thus made publicly visible. Some people who left OpenAI and Anthropic for Meta returned to their original companies. A new paper follows up on the emergent misalignment phenomenon: training AIs to reward hack on harmless tasks like poetry can cause misalignment in other tasks.

Biorisks

The New World screwworm is a parasitic fly species whose larvae burrow into wounds and other flesh in warm-blooded animals, and its spread can be particularly devastating to beef cattle herds. For decades, the screwworm had been contained on the South American side of a biological barrier in Panama, just adjacent to Colombia, in part through the release of sterile male flies of the species. But in 2023, screwworm detections exploded in Panama, and since then, outbreaks have spread northward to every Central American country north of Panama, and into Mexico. Mexico has seen a rapid rise in detections, with a 53% increase since July alone. The USDA is ramping up efforts to end the outbreaks in Mexico and Central America and to re-establish the previous biological barrier in Panama. The US recently saw a human case, in Maryland, in a traveler from Central America.

Forecasters estimate a 6.7% (range, 5% to 8%) aggregate probability that the screwworm will be reported in at least 5 cattle herds in the US by the end of 2026. On the optimistic side, forecasters point out that spreading through Mexico and upwards into the US would take some time, that the species was contained before and so could be pushed back again, and that if it was detected anywhere in the US, farmers and the USDA would cooperate and do everything possible to stop it.

On the other hand, if screwworm flies make it to the US, they will be much harder to stop in the US than in the Darien gap in Panama; containment would be much harder because the US and southern Mexico are large and sprawling. Additionally, because the screwworm doesn't selectively target cattle, and in fact can infect any warm-blooded animal, including species of both mammals and birds, it would take a massive effort to tamp down spread. And if it is detected in one farm, it wouldn't be that surprising to see it pop up in another farm as well.

With shifting climate patterns, we keep catching diseases spreading in the new regions. Chikungunya is spreading in Europe: France reported 45 new locally transmitted cases, and Italy, 22. And West Nile Virus is spreading along the Columbia River in the US.

The WHO warns that antibiotic-resistant whooping cough is spreading in the US. It can be fatal in children, but it is also preventable with vaccination.

RFK Jr. fired the CDC director, who had been nominated by the Trump administration and confirmed by the US Senate only three weeks ago, over disagreements about vaccine recommendations. Three other CDC vaccine officials resigned in protest. RFK Jr. has named a Peter Thiel protege and biotech investor, Jim O’Neill, as acting director of the CDC; O’Neill does not have a medical or scientific degree. Some forecasters view him as having a reasonable, although politically coy, perspective on vaccines, assess that a technocratic pick, albeit a MAHA-friendly one who served as RFK Jr.’s deputy, , is good news for this administration, and hope that he can steer the urge for reform productively. Other forecasters disagree, emphasize that the current administration is very anti-science compared to previous ones, and worry that much of what the CDC does behind the scenes to keep infectious diseases at bay and combat non-communicable diseases will be put at risk Meanwhile, RFK, Jr. says to “let measles run its course”. That’s what some said in 1990, and we had an urban health crisis.

And: Sudan recorded a thousand new cholera causes, and 36 deaths, in a week, amid its worst cholera outbreak in years, with around 100,000 suspected cases this year to date. Africa has launched a cholera response plan. South Africans struggle to find HIV medication after U.S. foreign aid cuts.

In Gaza, the director of the Al-Shifa Medical Complex says that an unknown virus is spreading in Gaza. Most likely, the virus is not novel, but rather, the virus is likely as yet unidentified because of a lack of detection resources.

Other

Extrapolating climate models to the 2100s and beyond leads to clearer AMOC shutdown predictions.

Many aging dams in the US are in poor or unsatisfactory condition and are at risk of failure. About 445 dams whose failure would cause lives to be lost need “immediate urgent action”.

Andreessen Horowitz, a large Venture Capital firm.

The Clerk is directed to withhold issuance of the mandate through October 14, 2025, during which the parties may file a petition for a writ of certiorari in the Supreme Court. If, within that period, any party notifies the Clerk in writing that it has filed a petition for a writ of certiorari, the Clerk is directed to withhold issuance of the mandate pending (1) the Supreme Court’s denial of certiorari or (2) a judgment of the Supreme Court if certiorari is granted. While the issuance of the mandate is withheld, the United States Court of International Trade shall take no further action in this case.

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