The Economy Just Hit a Wall, the FDA Is at War With Itself, and DHS Gave Palantir a Billion-Dollar Blank Check
February 20, 2026
1. GDP Faceplants, Bettors Price In Recession
The government’s own numbers just confirmed what your grocery receipt already told you: the economy is slowing fast.
Q4 GDP came in at 1.4% annualized, the Commerce Department reported Friday morning. Economists expected 3%. They were off by more than half. The prior quarter logged a blistering 4.4%, making the Q4 number look like a car hitting a median barrier. For all of 2025, the economy grew 2.2%, down from 2.3% the year before.
The official culprits: tariffs, the 43-day government shutdown last fall, and a consumer spending pullback. But the picture is uglier than the headline suggests. Reuters noted this is a “K-shaped economy,” where upper-income households are humming along while lower-income Americans are getting ground down by inflation, stalled wages, and rising borrowing costs. The 13-week Treasury bill yield sits at 3.60%, signaling no rate cut within three months. If you carry a mortgage, a car note, or credit card debt, relief isn’t coming.
The government claims the economy grew 2.2% for the year. That’s the Bureau of Economic Analysis talking. The same BEA whose figures get revised, sometimes dramatically, with every benchmark update. (Recall: just last week, the BLS wiped 1.03 million jobs off the books in its annual revision.) Take the 2.2% with the grain of salt it deserves.
Meanwhile, Friday’s S&P Global flash PMI showed US business activity expanding at its slowest pace in 10 months. Orders are receding at factories, new business is slowing for service firms, and employment growth has stalled across the board.
Polymarket bettors currently put the odds of a full recession by end of 2026 at roughly 23%, and that number was recorded before today’s GDP miss. The market for “negative GDP growth in 2026” is also live and climbing.
Why it matters: Tariffs, government shutdowns, and deficit spending all carry real costs. They just showed up. And the tools the government typically uses to respond (rate cuts, stimulus) are boxed in by inflation that won’t quit and a $36+ trillion national debt that’s rolling over at higher rates. The fire department is out of water.
Sources: Bloomberg, Reuters, Washington Post, NYT, CNN, Axios
2. The FDA Can’t Decide If It Wants to Approve Medicine or Burn It Down
The Food and Drug Administration is currently fighting a war on at least three fronts, and all of them involve the same agency contradicting itself within the span of days.
The Moderna saga. Earlier this month, Dr. Vinay Prasad, the RFK Jr.-appointed head of the FDA’s Center for Biologics Evaluation and Research, personally signed a “Refuse to File” letter rejecting Moderna’s application for the first mRNA flu vaccine in the US. Career scientists in the vaccine center had already decided to accept the application. Prasad overruled them. His objection: Moderna’s Phase 3 trial of nearly 41,000 adults compared the mRNA shot to a standard-dose flu vaccine instead of a higher-dose version recommended for seniors. It was a technicality no previous FDA leadership had ever used to block review of a vaccine application.
Then, on Tuesday, the FDA reversed itself. After what Politico reported was White House pressure, the agency agreed to review Moderna’s application after all. So within two weeks, the FDA rejected, then un-rejected, a flu vaccine application, for reasons that had nothing to do with whether the vaccine works.
The $500 million bonfire. This wasn’t Prasad’s only contribution. HHS Secretary Robert F. Kennedy Jr. killed $500 million in government contracts for mRNA vaccine research last August, halting 22 separate mRNA initiatives. These weren’t just COVID shots. Moderna had been running late-stage trials on mRNA vaccines for multiple sclerosis and other diseases. Those trials are now on hold or cancelled. Vaccine makers, facing an agency that rejects applications on technicalities and kills funding for the underlying technology, are pulling back from the US market entirely. The NYT reported that the policy changes have “sent a chill through the entire vaccine industry.”
The ACIP cancellation. On Thursday, HHS confirmed it won’t hold the Advisory Committee on Immunization Practices meeting that was scheduled for next week. ACIP is the panel that recommends which vaccines Americans should get. No meeting, no new guidance. This happened days after the American Academy of Pediatrics went to federal court trying to block the meeting because Kennedy had stacked the panel with appointees skeptical of vaccines. So the meeting was too compromised to hold but also too important to cancel. HHS cancelled it anyway. No reschedule date.
The new drug chief. Tracy Beth Hoeg, who was just appointed acting director of the FDA’s drug evaluation center, told staff in her first speech that she plans to scrutinize SSRI antidepressants used in pregnancy and RSV shots given to infants. Both are treatments with extensive safety records. Meanwhile, the CDC director position is vacant.
The government has no business mandating what you put in your body. Personal medical decisions belong to individuals. Full stop. But the answer to government-mandated vaccination isn’t government-obstructed medicine. When a single political appointee can overrule career scientists to block a vaccine from even being reviewed, when $500 million in research gets torched on ideological grounds, when the advisory panel gets cancelled because its new members are too controversial to convene, that isn’t medical freedom. It’s the same government power problem wearing different clothes.
The state shouldn’t force you to take a vaccine. It also shouldn’t use its regulatory monopoly to ensure you can’t get one.
Sources: STAT News, STAT News (Hoeg), Politico, NYT, Reuters (ACIP), Ars Technica, AJMC, The Guardian
3. DHS Wrote Palantir a Billion-Dollar Check and Skipped the Bidding
While most of DHS is technically shut down (more on that in a moment), the department somehow found the bandwidth last week to sign a $1 billion blanket purchase agreement with Palantir Technologies.
The five-year deal, reported by WIRED, lets every DHS agency buy Palantir software “without initiating separate competitive contracts.” That’s bureaucrat-speak for: ICE, Customs and Border Protection, the Secret Service, FEMA, TSA, and CISA can all purchase up to $1 billion in Palantir products and services on a pre-approved tab. No competitive bidding. No separate justification for each purchase.
Palantir already runs the digital backbone of ICE’s deportation operations. Last April, ICE paid the company $30 million to build “ImmigrationOS,” a surveillance platform providing “near real-time visibility” on immigrants. The company’s tools have been criticized by the EFF as creating “a massive surveillance dragnet.” We covered in Sunday’s newsletter that Palantir also has a $4 million contract with New York City’s public hospitals, scanning patient records of over 1 million New Yorkers who use the city’s 70+ public clinics.
The internal fallout is telling. After federal agents fatally shot two American citizens in Minneapolis in separate incidents weeks apart — Renee Good on January 7 by an ICE officer, and Alex Pretti on January 24 by CBP agents — Palantir employees flooded internal Slack channels demanding to know how their technology enabled the operations. CEO Alex Karp recorded a video for staff that, according to WIRED, failed to address direct questions. His solution: employees could sign NDAs to learn more.
Palantir CTO Akash Jain, in the email announcing the deal, acknowledged “increased concern, both externally and internally, around our existing work with ICE.” He then said the agreement could expand Palantir’s reach into agencies like the Secret Service, FEMA, and CISA.
A government that can’t fund its own cybersecurity agency (CISA has 62% of its staff furloughed due to the shutdown) but can sign a billion-dollar surveillance contract in the same week has very clear priorities. And “protecting the Fourth Amendment” isn’t one of them, no matter what the company’s PR materials say.
Sources: WIRED, SiliconAngle, EFF, WIRED (ImmigrationOS)
4. Two Carriers, Zero Explanation, and a 10-Day Fuse
Trump stood in front of his newly convened “Board of Peace” on Thursday — yes, that’s the actual name — and told Iran that “bad things will happen” if it doesn’t make a nuclear deal. He gave a deadline: 10 to 15 days. (He started at 10 days, then bumped it to 15 aboard Air Force One, because apparently even ultimatums have flex pricing.) The military is not waiting for the deadline.
The USS Abraham Lincoln carrier strike group has been operating in the Arabian Sea since its deployment roughly three months ago. The USS Gerald R. Ford — which left Norfolk in late June 2025 and has been at sea for nearly eight months, pushing toward the Navy’s post-Vietnam deployment record — is now transiting toward the Mediterranean, headed for the Middle East. Dozens of fighter jets, bombers, and support vessels between them. CNN reported Wednesday that the military told Trump it’s ready for strikes as early as this weekend, though no final decision has been made. The NYT noted that unlike Bush’s (false) case for Iraq, Trump has made “almost no case at all” for why a second major strike on Iran in less than a year is necessary. US troops haven’t received a target list, which CNN says is a sign Trump hasn’t “pulled the trigger” yet.
The price tag: two carrier strike groups run roughly $12 million per day to operate. A “sustained, weeks-long campaign” (the Pentagon’s term, per Reuters) would cost billions. Oil analysts say prices could spike $15 per barrel if rhetoric turns to action.
Polymarket bettors currently give US strikes on Iran by February 28 a 76% probability, with $16.8 million in 24-hour trading volume. The market for a full US invasion of Iran by March 31 is also live.
Meanwhile, inside Iran, the regime is still dealing with the aftermath of a crackdown on nationwide protests in January. The US-based Human Rights Activists News Agency (HRANA) has verified nearly 7,000 deaths, with thousands more cases still under review and other estimates running far higher. Iranians are now in their 40-day mourning cycle, which historically reignites unrest. Polymarket also puts the odds of Supreme Leader Khamenei being removed from power by September at roughly 50%.
We covered the initial carrier deployment on February 15. What’s changed since then: a second carrier, an explicit deadline from the president, military readiness for this weekend, and prediction markets pricing strikes as more likely than not. Whether this ends in diplomacy or missiles, the American taxpayer is underwriting the entire show.
Sources: Washington Post, NYT, CBS News, CNN, Reuters, NPR, The Intercept
5. DOGE Gutted the IRS. Congress Spent More Anyway.
Remember when the Department of Government Efficiency was going to save the taxpayer trillions? Here’s what actually happened.
The IRS lost 27% of its workforce during DOGE’s chainsaw sweep last year, including 40% of its IT staff. The cuts fell during what the Taxpayer Advocate Service warned was the worst possible time: right before implementation of new tax laws under the One Big Beautiful Bill. The Register obtained figures showing that “implementation of these legislative changes is at risk for the 2026 Filing Season.”
The fallout is now arriving at your mailbox. The IRS is sitting on a backlog of 590,000 unprocessed amended returns. Refund delays are expected across the board. Phone wait times, which had finally started to improve after Congress funded an IRS hiring surge, are back to nightmarish levels. If you filed on paper (still about 10% of filers), your return is essentially in a pile somewhere in Austin, Texas, waiting for one of the remaining humans to get to it.
And here’s the twist that should make every DOGE cheerleader spit out their coffee: Congress rejected most of the spending cuts. The Washington Times reported this week that the 2026 spending bills “actually hike spending slightly compared with 2025.” Most agencies saw funding held flat or increased. The DOGE crusade ended up delivering the worst possible outcome: the government is still spending the same money (plus a little more), but it broke the machinery that processes your tax return.
This is the eternal problem with “cutting government.” The political class doesn’t actually want to spend less. It wants the theater of efficiency. Elon Musk got his photo-ops, a few thousand mid-level bureaucrats lost their jobs, and the federal budget sailed right past the whole spectacle without noticing. The difference is that now, when you call the IRS to ask where your refund is, nobody picks up.
Sources: The Register, Washington Times, Chicago Sun-Times, USA Today, The Independent