Interview with Melissa Mahle, Strategic Risk Advisor

Risk Outlook: July 10, 2026

Jul 10, 2026

Welcome to the Stepwise Risk Outlook, which highlights and contextualizes over-the-horizon developments in key regions of the world and industries of the global market. Today’s featured interview is with Melissa Mahle, Strategic Risk Advisor.

Interview with Melissa Mahle, Strategic Risk Advisor

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Melissa Mahle is a senior advisor with Steptoe’s International Trade and Regulatory Compliance Group and leader of the Global Strategic Engagement Team’s analytical team, which produces the Stepwise Risk Outlook. Mahle is a former US intelligence officer with a background in intelligence, foreign policy advising, risk consulting and Middle East issues. She advises clients on political and security risks, crisis management, incident response, after-action reviews and business continuity. She is the author of Denial and Deception: An Insider’s View of the CIA from Iran-Contra to 9/11 (Nation Books, 2003) and, on the lighter side, she has authored children’s books and served as a Hollywood film consultant.

Stepwise Editor in Chief Anni Coonan sat down with Melissa Mahle as part of the launch of the expanded format for Steptoe’s leading risk publication, Stepwise Risk Outlook.

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Global

The International Olympic Committee provisionally lifts ban on Russia despite the ongoing war in Ukraine. This week, the IOC announced the decision to permit Russian athletes to compete in qualifiers for the Los Angeles 2028 Olympic Games, having been suspended since October 2023. The decision was based on a narrow reading of its own rules, finding that the Russian Olympic Committee (ROC) no longer includes as its members any regional sports organizations in territories falling under the jurisdiction of the National Olympic Committee of Ukraine – Luhansk, Donetsk, Kherson and Zaporizhzhia. The ROC told the IOC that it does not, and will not, conduct any activities in these territories.

International reaction is mixed. Critics argue that the IOC is condoning the ongoing Russian invasion of Ukraine, while others believe athletes should not be pawns in geopolitics. The ban was eroding before the IOC decision, with some international federations, such as those for figure skating and gymnastics, announcing new policies permitting participation of Russian and Belarusian athletes. But not all international federations plan to lift their bans, risking fragmentation across the sporting sector. The IOC has not yet decided whether Russia can display its flag and colors or have its anthem played at the Games. Russian athletes competed as neutrals at the 2024 Paris Olympics and 2026 Milano Cortina Winter Games. Most nations recognize the strategic value of sports diplomacy to advance foreign policy goals, build cultural connections, and project soft power. Russia, however, has been dogged by controversy beyond the Ukraine war, namely state-backed doping programs, undermining the legitimate achievements of its athletes and their international welcome.

Read More: International Olympic Committee, Reuters [paywall]

Europe

Former Commander-in-Chief of Ukraine’s Armed Forces Valerii Zaluzhnyi is seemingly positioning himself to run for office. Zaluzhnyi, who is currently in London as Ukraine’s ambassador to the UK, recently published an Op-ed with the Telegraph giving his thoughts on the current and future direction of Ukraine’s war against Russia. The article obliquely criticized his successor, Oleksandr Syrskyi, and by extension Ukrainian President Volodymyr Zelenskyy. Zaluzhnyi also reportedly told Zelenskyy that if elections were held this year he would run for Ukraine’s presidency despite Zelenskyy asking him to refrain to ensure national unity.

Zaluzhnyi is popular in Ukraine, and he enjoys a high level of public trust, but his polling numbers have dropped over the last year. Zaluzhnyi’s electoral backing in polling has dropped 9% over the last year, and he trails Zelenskyy significantly, although Zaluzhnyi would still come in second. Zelenskyy’s support in a future election has remained stable over the last year at slightly above 30%, so still well short of a majority. Polling results show a fragmented field, with the top three choices only getting slightly less than 60% of the vote.

Middle East

Syria claimed the Islamic State was behind recent bombings in Damascus. On Thursday, Syrian authorities arrested several suspects accused of orchestrating several recent explosions in Damascus – including one near the hotel of French President Macron during his visit this week – and claimed the individuals were tied to the Islamic State. The explosions killed one person and wounded 36 others, according to the final casualty toll announced by Syria’s Ministry of Health.

The bombings could constitute a troubling resurgence of IS capabilities as Damascus struggles to assert control over the whole of Syria. Analysts have long worried that policing gaps produced by the US’ withdrawal of troops, the imperfect integration of the Kurdish-led SDF (the US’ primary counterterrorism partner) into the Syrian military, and Damascus’ general struggle to establish security throughout the country’s borders. In February, a UN assessment reported that IS had already established networks across all Syrian governorates, and in the months following the US’ withdrawal, IS spokespeople have released their first public calls to action in years.

Asia-Pacific

New Zealand Prime Minister Christopher Luxon said Thursday the country is considering whether to join the historic “Ocean of Peace” defense alliance signed Monday between Australia and Fiji. Luxon’s announcement highlights shared concerns across the Pacific following China’s test missile launch earlier this week, an action several regional leaders criticized as destabilizing and indicative of Beijing’s expanding military reach.

The alliance’s deliberately open-ended structure allows additional regional partners to join, creating an opportunity for Pacific nations to strengthen defense coordination and develop collective responses to shared security challenges. Under the agreement, an attack on either party would be considered a threat to both, effectively a mutual defense treaty. For Wellington, whose only formal defense ally is Australia, joining the alliance would establish security cooperation with one of the region’s only other countries with a standing military. How Beijing views the development remains unclear, especially as China has spent the last few years cultivating closer ties with regional governments—such as policing ties with Vanuatu.

Read More: Reuters [paywall], Asia Times, CNBC, Center for Strategic and International Studies

Americas

Mexico has announced that it will pursue criminal complaints in the United States following the deaths of 17 Mexican nationals linked to Immigration and Customs Enforcement (ICE). This includes 14 who died in ICE custody and three who died during enforcement operations. The move follows the fatal shooting of Mexican national Lorenzo Salgado Araujo by an ICE agent in Houston, an incident that has drawn scrutiny from both Mexican officials and US lawmakers. Mexican Foreign Minister Roberto Velasco said President Claudia Sheinbaum instructed the government to take “forceful legal action” and seek investigations into the deaths as criminal matters. Mexico is also considering civil action against private companies operating detention facilities where several of the deaths occurred.

The dispute risks further straining US-Mexico relations amid tensions over security cooperation and trade negotiations. Sheinbaum’s administration appears determined to demonstrate a stronger defense of Mexican citizens abroad, arguing that diplomatic protests alone are no longer sufficient. Meanwhile, criticism of ICE has intensified within the United States, with four Democratic members of Congress calling for an independent investigation into Salgado’s death. In April, US authorities indicted the governor of Sinaloa and nine other Mexican officials for alleged ties to organized crime. These diplomatic strains risk spilling over into ongoing negotiations of USMCA, which has entered an annual review process.

Read More: BBC, CNN, Reuters [paywall]

Africa

Russian Foreign Minister Sergey Lavrov met with partners in the Sahel, pledging to deepen security cooperation amid ongoing jihadist insurgencies. Lavrov met with representatives from Burkina Faso, Mali and Niger to discuss ongoing counterterrorism operations and reemphasized Russia’s commitment to securing the Sahel. According to Russian state media, a memorandum of understanding was signed with the Burkinabe foreign minister to establish a framework for regular consultation between Russia’s Ministry of Foreign Affairs and the Alliance of Sahel States (AES). In addition, the parties discussed unspecified military and technical cooperation agreements, though the scope of any future assistance remains unclear. Russia’s Africa Corps has failed to recapture territory taken by insurgents in Mali.

Moscow has also expressed interest in renewing counterterrorism operations in Mozambique. Following talks with the AES, Lavrov met with the Mozambican President and offered support to fight Islamic State militants in the country’s Cabo Delgado province. The Wagner group had previously deployed to the province in 2019 but withdrew after sustaining heavy casualties.

Despite battlefield losses in Mali, Russia’s outreach underscores continued efforts to position itself as the preferred security partner for African governments. The US has made some gains in resuming security cooperation with Niger, transferring non-lethal military equipment in May. However, Washington continues to face distrust from AES members, obstructing intelligence sharing and security cooperation. Russia remains an influential actor despite tactical failures and rising unpopularity of the Africa Corps among civilian populations. However, whether Moscow can translate its diplomatic commitments into sustained operational gains remains uncertain.

Geoeconomics

The Federal Reserve has named 15 outside advisers to lead five task forces that could reshape how the central bank analyzes the economy, communicates policy, and manages its $6.7 trillion balance sheet. The communications group, led by former Bank of England governor Mervyn King, former Brazilian central-bank chief Arminio Fraga, and former Treasury official Peter Fisher, will review how the Fed explains decisions under uncertainty, including its use of forward guidance, quarterly rate projections, and post-meeting communications. Former Fed governor Jeremy Stein, former Reserve Bank of India governor Raghuram Rajan, and Harvard economist Karen Dynan will examine the costs and financial-stability implications of the Fed’s balance-sheet regime. Separate panels will study whether faster private-sector and real-time data can improve policy decisions; how artificial intelligence could affect productivity, employment, wages, and inflation; and whether the Fed needs to rethink how it identifies and responds to inflation. The independently operating groups will receive support from Fed staff and are expected to begin producing findings in the fall, with most recommendations due by the end of the year.

The review is the clearest institutional expression yet of Chair Kevin Warsh’s call for “regime change” at the Fed. Warsh has already shortened the FOMC’s policy statement, removed guidance about the likely direction of rates, declined to submit his own interest-rate projection, and argued that the central bank’s large bond portfolio gives it too much influence over credit allocation and financial markets. This membership is broader and more establishment-oriented than an “outsider” reform commission, suggesting Warsh is trying to build intellectual and institutional support for lasting changes rather than impose them unilaterally on a Federal Open Market Committee whose consent he will still need.

Disruptive Technology

Eight NATO members launched the Hybrid Alliance Layered Operations in Space (HALO) initiative. Germany, Finland, Canada, Denmark, Norway, Sweden, the Netherlands, and Türkiye agreed to link their military satellites into a “mega-constellation” to enable shared high-speed communications and missile tracking. This partnership is not an industrial tie-up or combined satellite project, but rather an information-sharing venture that combines NATO’s non-US space capabilities in a bid to achieve independent space-based intelligence. Canada is well-integrated into NORAD, the aerospace warning and control mission for the Arctic; Germany’s Rheinmetall and Finland’s ICEYE have previously announced a joint venture in a bid to supply the Bundeswehr’s space-based intelligence constellation; and Türkiye’s booming defense industry has included a sprint toward a sovereign space launch capability.

HALO intends to overcome the costs and coverage of single-nation satellite fleets, but could also run into a collective action problem. Within NATO, the US enjoys a de facto monopoly on space launch capabilities and low-Earth orbit satellite connectivity. Moreover, NATO Europe is not equipped to defend against anti-satellite offensive capabilities, such as jamming or interception. IISS predicts that NATO Europe will have to spend an additional $25 billion from current plans to close the capability gap with the US. Fiscal heavyweights like Germany or efficient industrial bases like Türkiye would likely have to take on an additional burden, which could increase distrust over time. Notably, France and the UK are not included in HALO as of yet.

Read More: NATO, Breaking Defense, IISS

Energy

The US, South Korea, and Japan have agreed to work together on small modular reactors (SMR). The agreement, which the three countries signed on the sidelines of the NATO summit in Ankara, foresees cooperation on deployment of SMRs to third countries. The agreement has an initial focus on the Indo-Pacific region to help partner countries meet their energy needs, according to the US State Department. The US will also allocate over $10 million in new funding for the Department of State’s Foundational Infrastructure for Responsible Use of Small Modular Reactor Technology (FIRST) Program.

This is the second US announcement of a new energy initiative with Indo-Pacific partners in recent months. In May, the US, Australia, India, and Japan, all of which make up the Quad group, signed an agreement on maritime security, port infrastructure, and energy to increase their cooperation in the region. The Indo-Pacific energy security initiative, which is part of the larger agreement, is intended to promote more resilient regional fuel and energy supply chains. The US plans to host a Quad energy security summit this year.

Russia and China are also working on SMRs both domestically and to deploy in other countries. Russia broke ground on a project in Uzbekistan that will include 2 SMRs alongside two larger units, and in 2025 China also intended to begin commercial operations at an SMR in 2026.

Read More:Reuters [paywall], US State Department, World Nuclear News, US News, Reuters [paywall], Oilprice.com

Transnational Crime and Corruption

Mexico announced an official investigation into the US’ alleged involvement in the capture of Sinaloa Cartel leader Ismael “El Mayo” Zambada García. According to the US, in July 2024, Zambada was kidnapped in Mexico by a rival drug trafficker and flown across the border to Texas, where he was “gifted” to US authorities prior to plea negotiations for the rival trafficker. US authorities have strenuously denied that they knew about, encouraged or assisted in the kidnapping. In a Wednesday press conference, Mexico’s attorney general alleged that new evidence pointed towards US involvement in the kidnapping, which would have violated Mexican sovereignty. Mexican authorities cited, in part, a museum plaque for the plane that transported Zambada describing that FBI agents “executed” the arrest of Zambada using the plane. Mexico also alleged that their investigators were denied access to the plane that transported Zambada.

The allegations are part of a rhetorical campaign between Mexico and the US over anti-cartel policy. Mexico has accused the US of conducting anti-drug special operations in its territory without permission. In April, CIA agents died in an accident while reportedly dismantling a drug lab in Chihuahua without informing Mexico City of their presence. The US has claimed that Mexico has not done enough to combat drug traffickers and that it has failed to confront political corruption from drug money.

Read More: The Guardian, El Pais [paywall], New York Times [paywall]