Plenty of headlines this week deserve attention, but four stand out for their potential long-term impact: a slowing US economy, President Donald Trump's approval rating falling to a record low for his presidency, Saudi Arabia's announcement of a new maritime coalition to secure a critical global shipping route, and fresh evidence that frontier AI models can breach supposedly secure systems on their own, underlining growing national security risks.
The US's economic growth slowed in the second quarter, with increasing imports widening the trade deficit. The world’s most powerful economy had grown by 1.5% in the second quarter, down from 2.1% in the first three months of 2026. Analysts had earlier forecast growth to remain around 2%. The slowdown comes amid the war in Iran and Trump's tariffs, with higher oil prices adding to the pressure.
The bright spot was that consumer spending was strong, as was business investment in artificial intelligence infrastructure. But this was offset by lower government spends, investment and exports, according to the BBC.
The International Monetary Fund (IMF) in its July 2026 World Economic Outlook had projected GDP 2.3 % growth for the US in 2026.
Michael Pearce, chief US economist at Oxford Economics, quoted by the BBC said the growth slowdown underplayed the "strength" of the US economy, suggesting a pick up to cross 2% later this year. There were signs that investment in industries away from the AI boom was "reviving,” Pearce said. AI-related investment was still “the biggest game in town," he said, adding that the rise in imports of microchips used in its development meant its contribution to growth remained "modest."
Slowing of the US economy in one quarter is no big deal but if things don’t pick up, Trump may have to look at innovative approaches to deal with the economy – that may put other countries in a bind.
The midterm elections are just four months away. Gasoline prices at the pump are more than $4 a gallon. There is no sign of the Iran war ending the way Trump wants it to. The US Federal Reserve, at its latest meeting, left interest rates at 3.5%-3.75%.
Remember Trump criticising former Federal Reserve chief Jerome Powell for not lowering interest rates? Well, Trump’s own pick, Kevin Warsh, wasn’t able to lower the interest rates this week. What’s more, of the seven-member board of the Federal Reserve, three were in favour of a rate hike, which would have spiked inflation. Pretty pickle – all this.
Talk of falling numbers, one telling number that came out this week was Trump’s popularity which was found to have plunged to 34%, according to CNN.
The CNN poll found a record-high 73% of US adults thinkTrump hasn’t paid enough attention to the country’s most important problems. Only 27% said Trump focussed on the right priorities.
Two-thirds of Americans said Trump’s policies have worsened economic conditions and that his military decisions in Iran had hurt the US. Around three-quarters said Trump wasn’t in touch with the problems faced by ordinary Americans. More than 6 in 10 Americans said Trump has gone too far in pursuing his personal business interests while serving as president.
Within his own Republican Party, Trump’s approval rating hit a new low with just 19% saying they are enthusiastic about the rest of his second term. All very telling. (Remember Trump whipping out a baseball cap with Trump 2028 on it? Most news outlets put it down as a joke.)
Speaking of the Iran war, the conflict seems to have widened – yes, further – with the Houthis now entering the picture on the side of Iran. This means a route that kept Saudi Arabian oil flowing into the global markets through the Straits of Bab-al-Mandeb is now threatened.
Since the start of the Iran war in February, the Straits of Hormuz have been virtually closed for fuel exports. Riyadh, on its part, was able to export most of its oil mainly through the East-West pipeline, which connects oil refineries on the east coast to the Yanbu terminal on the Red Sea coast.
Saudi exports have to cross Bab al-Mandeb, and Houthis control Yemen’s western province, facing the maritime chokepoint. That gives the group a strategic advantage to target ships in the Red Sea.
In response, Saudi Arabia and 13 other countries have announced the creation of a maritime military coalition to safeguard freedom of navigation through the Bab al-Mandeb Strait, the Red Sea and the Gulf of Aden. Turkiye, Kuwait, Bahrain, Qatar, Jordan, Egypt, Pakistan, Djibouti, Somalia, Bangladesh, Yemen, Sudan and the Comoros are understood to be the other signatories to the alliance, according to Al Jazeera. Notably, the UAE and Oman have stayed out of this coalition – at least for now. Interesting development this. The West Asia region is undergoing major churn and realignment with immense implications; it will take a while for the full extent to come to light.
AI crosses another line
Anthropic revealed that during internal security testing, its Claude models independently exploited weaknesses to gain internet access and compromise three organisations in what was supposed to be an isolated test environment, and connected to the internet. This prompted Anthropic to check whether similar attacks had happened in the past, and three cases were uncovered in the process. The incidents came days after OpenAI reported similar behaviour in its own models.
Anthropic later urged other AI labs to perform similar reviews to gauge the risks and capabilities of their AI models. The tech company said it had reviewed thousands of tests to find evidence that its Claude family of AI models had managed to get online even though it was supposed to be in an isolated test environment, cut off from the internet.
Most alarming of all, the hacked computers and networks did not detect the intrusions. The development poses new questions for cybersecurity experts around the world on data security, privacy, espionage and a whole host of associated issues.
In the new world of AI tech, which is growing at an unprecedented pace and scale, this development shows that companies are only becoming aware of the capabilities and capacities of new AI tools after the damage (or not in this case) is done. A sobering takeaway, perhaps?