Economy
Türkiye helping shape NATO’s future security architecture: TAI
Türkiye is making a strategic contribution to NATO’s future security architecture through its technology development capacity, engineering expertise and defense industry cooperation, according to the chief of the top Turkish defense contractor.
Remarks by Mehmet Demiroğlu, the CEO of Turkish Aerospace Industries (TAI), came during a panel, Perspectives from Ankara: The security and defense implications of the NATO Summit, hosted by the U.K.-based think tank Chatham House in London.
The panel addressed trends shaping the defense industry, evolving security requirements and the transformative impact of technology, Demiroğlu said on the Turkish social media platform NSosyal.
Discussions also focused on joint capability development, technology integration, and cooperation among NATO defense industries, as well as Türkiye’s strategic role in this transformation.
Demiroğlu said the Turkish defense industry had moved beyond merely developing military platforms and become a strategic stakeholder in the emerging security architecture shaped by the “NATO 3.0” vision.
He said Türkiye will continue contributing to NATO’s future security architecture through its ability to develop technology, its engineering strength, and its approach to cooperation.
Production capacity central to collective deterrence
Demiroğlu said production capacity, technological development, and joint industrial projects were becoming key elements of NATO’s collective deterrence.
Under the new security paradigm, security depends not only on military strength but also on a robust defense industry, sustainable manufacturing capacity, resilient supply chains, technological superiority and cooperation among allies, he said.
Türkiye’s defense industry ecosystem is well positioned to support this approach, while TAI contributes through its indigenous platforms, engineering infrastructure and production capabilities, he added.
Demiroğlu said Türkiye had become a major producer contributing not only to its own defense needs but also to the security of friendly and allied countries.
He also stressed the importance of stronger transatlantic cooperation for European security.
“We want to see a stronger NATO with contributions from both sides of the Atlantic,” he said.
Defense spending should be assessed not only by budget size but also by the capabilities developed to address specific threats, he added.
Hürjet strengthens Türkiye’s role in NATO ecosystem
Demiroğlu said the planned export of the Hürjet advanced jet trainer to Spain represented more than a commercial achievement.
The project is a strategic step strengthening the position of Türkiye’s aviation technologies within the European and NATO defense ecosystem, he said.
Hürjet can be adapted to different user requirements and conduct missions in line with NATO standards, helping deepen cooperation with allied countries, he added.
Demiroğlu said cost-effective systems that can be produced rapidly and adapted to operational needs were gaining importance alongside advanced platforms.
TAI will continue strengthening Türkiye’s global position in the defense industry while contributing to NATO’s and Europe’s future security architecture, he added.
Oman has presented Iran with a plan backed by Gulf states to manage the Strait of Hormuz, including the collection of voluntary transit fees, a report said Tuesday. The proposal could provide a basis for ending the trade disruption in the waterway caused by the U.S.-Israeli war on Iran.
U.S. President Donald Trump, who abruptly called off a two-week U.S. bombing campaign over the weekend in his latest strategic U-turn, said there were “good talks” underway with Iran but threatened to restart strikes unless negotiations deliver.
Iran denies seeking to resume talks with the United States. Washington launched its renewed bombing campaign earlier this month to break Iran’s grip on the Strait of Hormuz, through which about a fifth of global oil and liquefied natural gas flowed before the war.
Iran effectively shut the strait to ships other than its own after the United States and Israel attacked on Feb. 28. A deal last month between the United States and Iran partially reopened it, but the agreement collapsed in early July after Iran fired on ships using a channel it does not approve.
Iran has said it wants to manage the strait alongside Oman, which controls the opposite shore, and charge service fees to ships that use it. Washington wants to return to the status quo prior to the war, when ships were able to pass freely with no payments, and says charging mandatory fees would be illegal.
Under the Omani proposal, Iran would not exercise sole control and fees would be voluntary, Reuters said, citing a Gulf source and a Western diplomat briefed on the matter.
The system would be analogous to one in place on Asia’s Strait of Malacca, where Indonesia, Malaysia and Singapore ask ships to pay voluntary contributions to fund navigation, environmental protection and search-and-rescue operations.
The Western diplomat compared it to a voluntary carbon tax for flights, where anyone buying a plane ticket can choose to tick a box if they want to pay to offset their emissions.
The Gulf source said that as of Monday evening there had been no formal response from Iran to the proposal. Omani officials met Iranians in Tehran over the weekend.
Iran’s Foreign Minister Abbas Araqchi discussed the Strait of Hormuz with his Omani and Saudi counterparts on Monday and stressed the need for regional cooperation, an Iranian Foreign Ministry statement said.
Trump warns of more strikes
Trump called off his latest campaign of airstrikes after receiving advice from military commanders that the strategy had run its course. The 13 nights of renewed U.S. bombing killed scores in Iran and destroyed bridges and tunnels across the south as well as military targets.
Iran had responded with attacks on U.S. bases in neighbouring countries that killed four service members, and strikes on civil infrastructure in Gulf states that it said were in response to U.S. strikes on civilian targets.
Iran has said it would hold fire as long as Washington does. But drone attacks were reported in Jordan, Saudi Arabia and northern Iran on Monday, and Jordan reported another drone being downed on Tuesday.
Speaking on Monday, Trump expressed optimism for a deal to end the five-month conflict, while warning that U.S. strikes would resume if negotiations failed to deliver.
“I think there’s a good chance that something could happen, and if it does, good, if it doesn’t, we go back to doing what we were doing two days ago.”
Iran says it has not sought any new negotiations with the United States, which it accuses of violating the agreement reached last month on a framework for talks to end the war.
The U.S. president is scheduled to meet Israeli Prime Minister Benjamin Netanyahu in Washington on Tuesday. Although Israel was involved in the initial bombing campaign, it has not been part of subsequent peace talks, and recent relations between the two leaders have been strained.
Trump has had to rein in the Israeli leader from attacking targets in Lebanon, complicating peace talks with Tehran.
The end of the U.S. bombing campaign over the weekend sent oil prices tumbling by around 8% on Monday, and the fall continued on Tuesday. Brent crude futures were down more than 2.5% at around $86 a barrel by mid-morning on Tuesday.
Washington and Tehran reached an agreement in June on a framework for talks meant to take place by the end of August to resolve major issues such as Iran’s nuclear program. But they have disputed the meaning of the memorandum’s language about the strait, with Washington insisting it requires Tehran to allow free travel, while Iran says it grants it the authority to supervise transit.
An electro-optic reconnaissance, surveillance and targeting system developed by Türkiye’s state-run defense contractor Aselsan has been integrated into the South African-developed multi-role tactical aircraft Mwari, a report said Tuesday.
That expands the Turkish company’s international footprint with ASELFLIR-500, a product the country developed indigenously following years of restrictions and embargoes on drone camera systems.
The integration enhances the capabilities of the aircraft, developed by South Africa’s Paramount Aerospace Industries, in intelligence, surveillance and reconnaissance, as well as target detection, tracking and designation, Anadolu Agency (AA) said, citing information provided by Aselsan.
Designed for both manned and unmanned aerial platforms, the ASELFLIR-500 combines a high-resolution mid-wave infrared camera, a daylight camera and a short-wave infrared imaging channel.
The system also features laser rangefinding, laser target designation, automatic target tracking, precision stabilization and advanced image-processing capabilities. Weighing approximately 54 kilograms, its laser rangefinder and designator have an operational range of up to 35 kilometers (22 miles).
Equipped with artificial intelligence-supported image processing, the ASELFLIR-500 enables long-range target detection and identification by processing imagery from multiple optical channels.
Its four-axis gimbal and two-axis optical stabilization system minimizes the effects of aircraft maneuvering and vibration, allowing operators to maintain a stable view of targets during missions.
The two-seat Mwari aircraft features an open architecture and plug-and-play integration approach, enabling it to be configured with a range of sensors, weapons and mission systems.
It is designed for intelligence, surveillance and reconnaissance missions, border and coastal security, counterinsurgency, counterterrorism and precision-strike operations.
Powered by a single turboprop engine, the aircraft can carry payloads of up to 1,000 kilograms (2,205 pounds) across six underwing hardpoints. It has a maximum cruise speed of about 230 knots, a service ceiling of 21,000 feet and a mission range of approximately 1,150 nautical miles.
The integration combines Türkiye’s expertise in electro-optical systems with South Africa’s aircraft development capabilities and is expected to support Aselsan’s expansion into new export markets while enhancing the Mwari’s competitiveness in international sales campaigns.
Aselsan began serial production of the ASELFLIR-500 in 2024. The system has since been integrated into multiple aerial platforms, including the world-renowned Turkish combat drones, including Bayraktar TB2 and Bayraktar TB3, and has been exported to more than 20 countries.
Montenegro has extended visa-free entry for Turkish citizens until the end of October, while announcing that nationals of Russia and Belarus will be required to obtain visas from November as the Balkan nation continues aligning its visa policy with European Union standards.
According to the new measures, visa-free access for citizens of Türkiye, China and Saudi Arabia will remain in force through Oct. 31, local media reported, citing a government decision.
The move forms part of Montenegro’s efforts to harmonize its visa regime with EU rules under Chapter 24 of its accession negotiations, which covers justice, freedom and security.
Under the updated rules, eligible travelers from the affected countries may stay in Montenegro without a visa for up to 30 days, provided they are traveling as part of organized tourist groups or hold diplomatic or official passports and can demonstrate onward or return travel arrangements.
Montenegro reduced the visa-free stay for Turkish citizens from 90 days to 30 days late last year following security-related incidents in the capital, Podgorica.
The government aims to complete full alignment of its visa policy with EU requirements by the end of next year under its reform agenda.
As Montenegro advances toward EU membership, its passport is expected to become more valuable in terms of international mobility, potentially increasing demand for Montenegrin citizenship, particularly among people with family ties to Serbia, Bosnia-Herzegovina and Türkiye.
An A350 jet being developed for record-setting commercial flights landed in France from Melbourne on Tuesday after Airbus completed a test flight lasting more than 24 hours, drawing heavy attention from online flight trackers.
The test marks a key step in Qantas’ Project Sunrise, which aims to launch the world’s longest commercial passenger services and reshape long-haul travel by eliminating stopovers between Australia and Europe.
The specially adapted A350-1000ULR airliner is due to debut with the Australian carrier’s nonstop Sydney-London route from 2027. Airbus has been conducting a two-month test campaign on the aircraft since June.
Airbus said the aircraft, which boasts a specially designed extra fuel tank, remained in the air for 24 hours and 24 minutes, covering 23,075 kilometers (14,338 miles) without stopping, before landing at the plane’s factory in Toulouse, France.
Flight-tracking provider Flightradar24 said the trip was the second-most-tracked flight ever on its channels, behind a 2024 flight carrying Queen Elizabeth II’s coffin, with more than 3.6 million people following its progress northward via Canada.
In 2005, a Boeing 777-200LR Worldliner flew 21,601.7 km from Hong Kong to London in 22 hours and 42 minutes.
Qantas has ordered 12 modified A350-1000ULR aircraft, designed to connect Australia’s east coast with London and New York in about 20 hours. The services aim to turn what was once a five-day journey on the “Kangaroo Route” to London into a single flight lasting 19 to 21 hours, depending on routing and winds.
The first aircraft, which carries 20,000 liters of fuel and can seat 238 passengers, is due for delivery in April 2027. Qantas expects to operate daily nonstop flights between Sydney and London from October 2027.
Prime Minister Anthony Albanese said Tuesday that Australia will consider building its first new oil refinery in more than 60 years, as conflict in the Middle East tightens overseas supplies and highlights the need to strengthen energy security.
Albanese said the project will help build Australia’s resilience and sovereign capability on fuel, potentially helping shield the country from future supply shocks.
If the project proves feasible, the new large-scale oil refinery will be built by industrial chemical producer Perdaman in Western Australia, Albanese said.
“The war in the Middle East … is having an impact here, like it’s having an impact right around the world,” Albanese told reporters from Karratha in Western Australia’s Pilbara region.
“One of the things that building national resilience does is it makes Australia less vulnerable to the impact of events around the world.”
Albanese said his government and the Western Australia state government will jointly spend AU$4 million ($2.8 million) on a feasibility study for the refinery.
“We want to make sure that we get the right location but we want to make sure as well that it’s a project that stacks up, that can go forward,” Albanese added.
Australia depends on imports for about 80% of its fuel needs and has been racing to secure supplies amid the Iran war.
The government’s push to cut its import dependence on oil comes after an Australian Treasury report warned that the global oil market has become more vulnerable “with weaker buffers against supply shocks.”
Global oil inventory levels have dropped since conflict in the Middle East intensified. At the same time, refined fuel markets are now at risk of tightening further, the treasury said in a briefing provided to Treasurer Jim Chalmers over the weekend.
Most of Australia’s domestic oil refineries were built during the 1950s and 1960s, but high operating costs and the emergence of large refineries across Asia forced many to shut down over the past three decades.
Ampol’s Queensland refinery and the Viva Energy facility in Victoria – both on the country’s east – are the only two operational now, compared to eight in 2000.
Western Australia’s only refinery was shut down in 2021 after BP decided to convert its 146,000 barrels per day Kwinana plant into a fuel import terminal.
The bar for a U.S. Federal Reserve (Fed) interest rate hike this week is likely higher than rate futures markets suggest, owing not only to softer-than-expected inflation data and a fresh easing of hostilities between the U.S. and Iran, but also to concerns that markets would interpret a single hike as a sign that more increases are ahead.
Going into the July 28-29 policy meeting, just the second one led by Fed Chair Kevin Warsh, the U.S. central bank had left its benchmark policy rate unchanged in the 3.50%-3.75% range since December.
The probability for a hike this week, as reflected in rate futures prices, had been growing on the renewed rise in energy prices and the hawkish intonations of a number of Warsh’s colleagues.
If history is any guide, though, when the Fed hikes or cuts rates after an extended hold, it keeps going in the same direction for at least a few meetings, and policymakers may not be quite ready to send that signal.
“They don’t usually do a one-and-done, so it really means … the (policy) committee has to decide whether they’re going to commit to a sequence of rate increases,” said James Bullard, who led the St. Louis Fed from 2008 until 2023 before becoming the dean of the Mitch Daniels School of Business at Purdue University. “I don’t think they’re ready to do that at this meeting.”
Hawks versus doves
At the Fed’s June 16-17 meeting, Warsh’s first as head of the central bank, all 18 of his colleagues supported the decision to leave the target for short-term borrowing costs unchanged, despite a few who, even then, saw the case for a rate hike.
In the weeks since, the hawkish case has lost a little steam. Consumer prices rose 3.5% in June from a year earlier, the Bureau of Labor Statistics reported earlier this month, still high but down from 4.2% in May as a U.S.-Iran cease-fire lowered fuel prices.
Trend inflation, estimated by stripping out volatile energy and food prices, also eased, with the core Consumer Price Index measure dropping to 2.6% from 2.9%. The influential head of the New York Fed expressed some conviction earlier this month that the trend would continue.
The labor market, meanwhile, has remained on solid ground. Job growth slowed sharply in June, but the gain of 57,000 in nonfarm payrolls was above what economists estimate is the so-called break-even rate where there are enough jobs generated to keep up with workforce growth. The unemployment rate ticked down to 4.2%. Hourly wage growth was 3.5% on a year-over-year basis, suggesting the labor market was not contributing to inflation.
Warsh, though quiet on his own rate-path views, has said he believes productivity growth may allow for faster economic expansion without stronger price pressures.
Still, the underlying reasons prompting half of the Fed policymakers at the June meeting to pencil in a higher policy rate by the end of this year remain intact. Inflation has been running above the Fed’s 2% goal for more than five years, and it reaccelerated in the first half of this year. Oil prices shot upward again this month as the cease-fire in the Middle East war fell apart, rekindling inflation concerns that some economists and Fed policymakers worry are already broadening beyond fuel and grocery prices, particularly as investment in artificial intelligence supercharges demand in some sectors of the economy.
The Fed will announce its policy decision at 2 p.m. EDT (6 p.m. GMT) on Wednesday following the end of a two-day meeting. Most economists say they expect at least one and as many as three dissents from policymakers favoring a rate hike, laying the groundwork for the start of a sequence of rises in borrowing costs in September unless inflation takes a decided turn for the better before then.
“September remains our base case for the first hike,” analysts at Capital Economics wrote last week. “By then, the Fed should have greater evidence that strong goods price pressures are not fading, despite the easing of tariff effects. Moreover, a September hike is now fully priced into markets, which Warsh has stressed will be an important steer for policy decisions under his chairmanship.”
Some analysts, however, see a case to get going now, especially if the new Fed chief is as serious about containing inflation as he has stated. “We doubt Warsh would face widespread opposition if he argued for tightening. The final decision could go either way, but we think the Fed is more likely to raise rates by 25 basis points on Wednesday than to stand pat,” analysts at Wrightson ICAP said.
Once Fed hikes, it usually keeps going
An isolated Fed rate hike is rare. The last time the central bank raised rates without delivering another one soon after was in 2015, but it wasn’t for lack of trying, with policymakers led by then-Fed chief Janet Yellen repeatedly promising “normalization” after years of a near-zero policy rate. It took a year for policymakers to feel the economy was strong enough to handle more rises in borrowing costs, but eventually they got there.
The one clear exception was in March 1997, the only interest rate adjustment of the modern era that was sandwiched by moves in the opposite direction. Transcripts from that meeting show that while then-Fed Chairman Alan Greenspan felt “the odds are better than 50/50” that the central bank would raise rates again, he preferred markets not make that presumption, and took the unusual step of issuing a statement to announce the move.
The minutes of each subsequent meeting that year did note a “firming” bias, but in the end inflation never accelerated enough to force the Fed to follow through. Ultimately, the shock of Russia’s debt default and the near-failure of a prominent U.S. hedge fund triggered a series of rate cuts starting in September 1998.
At this week’s meeting, markets are pricing about a one-in-three chance of a hike. Economists say it’s worth looking beyond a single meeting for a read on what’s actually at stake.
“The real discussion is whether the Fed will start a proper hiking cycle, which is typically delivered through at least three hikes, or not hiking at all,” analysts at Bank of America wrote.
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