The US decision to reduce its long-range missile presence in Europe is weakening NATO's deterrence against Russia. This move, part of a 2022 US-Germany agreement to periodically redeploy missiles, comes as US military commitments in the Middle East divert resources. The expiration of the New START treaty adds to concerns about NATO's defensive posture.
Market indicators reflect a shifting perception. The probability of a NATO-Russia military clash by December 31, 2026, dropped from 22% to 18%, while the June 30, 2026, sub-market stands at 4.7%. Analysts classify the impact as moderate, signaling reassessment of immediate risks. Key factors to watch: NATO's strategic response, European defense commitments, Russian official reactions, and further US missile deployment decisions.