  We present HST photometry of a selected sample of 50 long-period,
low-extinction Milky Way Cepheids measured on the same WFC3 F555W, F814W, and
F160W-band photometric system as extragalactic Cepheids in SN Ia hosts. These
bright Cepheids were observed with the WFC3 spatial scanning mode in the
optical and near-infrared to mitigate saturation and reduce pixel-to-pixel
calibration errors to reach a mean photometric error of 5 millimags per
observation. We use the new Gaia DR2 parallaxes and HST photometry to
simultaneously constrain the cosmic distance scale and to measure the DR2
parallax zeropoint offset appropriate for Cepheids. We find a value for the
zeropoint offset of -46 +/- 13 muas or +/- 6 muas for a fixed distance scale,
higher than found from quasars, as expected, for these brighter and redder
sources. The precision of the distance scale from DR2 has been reduced by a
factor of 2.5 due to the need to independently determine the parallax offset.
The best fit distance scale is 1.006 +/- 0.033, relative to the scale from
Riess et al 2016 with H0=73.24 km/s/Mpc used to predict the parallaxes
photometrically, and is inconsistent with the scale needed to match the Planck
2016 CMB data combined with LCDM at the 2.9 sigma confidence level (99.6%). At
96.5% confidence we find that the formal DR2 errors may be underestimated as
indicated. We identify additional error associated with the use of augmented
Cepheid samples utilizing ground-based photometry and discuss their likely
origins. Including the DR2 parallaxes with all prior distance ladder data
raises the current tension between the late and early Universe route to the
Hubble constant to 3.8 sigma (99.99 %). With the final expected precision from
Gaia, the sample of 50 Cepheids with HST photometry will limit to 0.5% the
contribution of the first rung of the distance ladder to the uncertainty in the
Hubble constant.
