A new government regulation requires all team members to work remotely for the next iteration, affecting backlog priorities. What should the project manager do?

The correct answer is to inform the product owner of the required change as soon as possible. In Agile, the Product Owner is responsible for managing the product backlog, including its prioritization. A new government regulation directly impacts the project's context and potentially its deliverables, necessitating immediate communication to the Product Owner so they can assess the impact and adjust the backlog accordingly. Communicating to the project sponsor at the next retrospective is too late; immediate action is required. Reprioritizing the backlog yourself (as the Project Manager) or asking the team facilitator to do so bypasses the Product Owner's authority and responsibility for the backlog. While the team and facilitator will be involved in the subsequent reprioritization, the initial notification and decision-making authority rests with the Product Owner.