Hassett Emerges as Frontrunner in Trump Fed Chair Audition

Summary

Bloomberg Businessweek Podcast Summary

Episode: Hassett Emerges as Frontrunner in Trump Fed Chair Audition
Date: November 25, 2025
Hosts: Carol Massar & Tim Stenovec
Guests: Stuart Kaiser (Citi), Sarah Frier (Bloomberg News), Jennifer Welch (Bloomberg Economics), Jennifer Eubank (Adamant Strategic Advisors), Ryan Kelly (Hennessy Funds)

Overview

This episode explores major shifts in U.S. monetary policy, tech sector dynamics, global geopolitics, and the evolving landscape of cybersecurity. With the news that Kevin Hassett could be President Trump’s pick for the next Fed Chair, the show analyzes the potential market and policy ramifications. The discussion then moves to Big Tech—particularly Alphabet’s AI resurgence, rivalries in the AI race, the economic effects of generative AI, and how these forces are disrupting online content. Later, expert guests unpack the latest on Ukraine-Russia peace talks and their geopolitical implications, before turning to cybersecurity threats and the rapid rise of AI-powered attacks coming out of China. The episode concludes with actionable investment insights focused on midcap equities, retail trends, and AI adoption.

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Key Segments & Insights

1. Fed Chair Watch: Kevin Hassett as Frontrunner

[01:56–05:01]

• Bloomberg News breaks the story: Kevin Hassett (National Economic Council) has emerged as Trump’s leading candidate for Fed Chair. The market reacted positively: yields fell, stocks rose.

• Panel Discussion:

  • Stuart Kaiser (Citi): Notes Hassett has been in the mix along with Rick Rieder and Kevin Warsh. All are seen as credible. While the President often leans toward dovish candidates, Fed independence is generally preserved.

    “I think Hassett is, from an economics perspective, on the credible side of things, without a doubt.” —Stuart Kaiser [03:02]

  • Any candidate would face a split FOMC, meaning individual sway is limited.
  • The Fed Chair’s independence and adherence to “incoming data” is emphasized, despite political preferences.

Notable Quote:

“You would hope he's going to make decisions based on...the incoming data. Clearly, a president is going to pick a chair that is consistent with their view. So it wouldn’t surprise you that maybe Trump would settle on someone that skews a touch more dovish.” —Kaiser [03:44]

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2. Market Outlook & Risk Factors

[05:01–08:21]

• Market Sentiment:

  • Stuart Kaiser describes markets as "unsettled" due to:
    • Pullback from retail investors.
    • Shifting reaction to AI trends (Meta, Palantir, Oracle, Nvidia).
    • Weak retail earnings & cautious commentary (“US consumer is under pressure”).
    • Fed uncertainty.

• Forecast:

  • “If we had to pick one, we’re going to pick higher into year end.” But risk/reward is less attractive than a few months ago (seasonality + possible rate cut provide some upward momentum).
  • December 16 is highlighted as a date to watch (key payrolls data). The FOMC will have to act without all the usual data, suggesting greater volatility.

    “Our view is the unemployment rate, if you had to pick one thing, is the single most important thing for the market.” —Kaiser [06:58]

  • Weak holiday spending and a bad labor report could turn his outlook bearish.

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3. Alphabet’s AI Comeback & The Battle for Search

[10:49–17:48]

• Alphabet’s Resurgence:

  • Sarah Frier: Google, once seen as slow to capitalize on its own AI innovations, is “firing on all cylinders” in 2025. Gemini LLM is outperforming rivals, Google’s TPUs are viewed as credible Nvidia alternatives, and the company is reshaping internet search with AI-driven results.

    “The company seems to be shipping products faster and doing it in a way that is high quality.” —Sarah Frier [12:40]

  • Major US firms—including Meta—are showing interest in using Google’s chips (TPUs) for their own AI.

• Search Disruption:

  • Google’s integration of AI-generated answers into search is changing user behavior, threatening websites that rely on traffic from organic search (e.g. recipe bloggers).

    “As Google directs more people to AI answers...that means traffic is diverted away from websites...the entire Internet could crumble in a way.” —Frier [17:48]

  • There are risks of AI “Frankenstein recipes” and unreliable information if web creators can no longer monetize their expertise.

Memorable Moment:

• Frier discusses how inaccuracies occur:

  “Google mixed up one of [a blogger’s] cake recipes and told people to cook this six inch cake for three to four hours. You’d get charcoal!” [20:02]

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4. Ukraine Peace Negotiations—Who’s in Control?

[25:32–32:03]

• Jennifer Welch (Bloomberg Economics):

  • The U.S.-Russia-Ukraine peace plan seemed to favor Moscow, capping Ukraine’s military and denying NATO accession in exchange for vague guarantees.
  • Intense back-and-forth negotiations adjusted nine of 28 terms, but there’s skepticism that Russia will accept.

    “Our assessment is that Russia is unlikely to receive in a positive way those altered terms based on...prior rounds of negotiations.” —Welch [26:54]

• Geopolitical Complexity:

  • Confusion over who is driving the negotiations—US, Ukraine, EU, or Russia.
  • Europe wants to prevent a peace that would let Moscow regroup; fears persist of Putin repeating a Crimea-style land grab after peace is achieved.

• On Potential Outcomes:

  • Russia is betting on time and battlefield gains. Only harsher sanctions could push Moscow’s calculus toward the negotiating table.

• China-US Truce:

  • The Trump administration prioritizes stability for now but risks abound (e.g. export controls, Congressional actions).

    “At the moment, Washington seems very focused on maintaining it and keeping it in place.” —Welch [32:03]

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5. AI, Cyber Threats and National Security

[32:18–37:19]

• Guest: Jennifer Eubank (Adamant Strategic Advisors, former CIA)

  • While Russia is active, China is the main threat in cyberspace, having deployed the first end-to-end AI-powered cyber campaign (90% automated attacks).

    “It’s really all about China right now...in terms of sophistication, scale, and ambition.” —Eubank [33:22]

  • The confluence of AI and cyber marks a “major shift”—defenses must increasingly become machine-driven.

• AI as Double-Edged Sword:

  • The Genesis Mission executive order aims to accelerate American AI innovation, but also dramatically raises security stakes as sensitive data pools grow.

    “Like any new technology, it’s both shield and sword.” —Eubank [35:35]

• Practical Security Advice:

  • The most effective personal defense: "Put multifactor authentication on any account that will allow it and that will stop virtually all nefarious activity..." —Eubank [37:05]

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6. Drive to the Close: Investment Themes, Retail & AI

[40:22–48:56]

• Markets Recap:

  • Stocks were broadly higher, health care and consumer sectors outperformed, and small caps posted a significant gain (Russell 2000 up over 2%).

• Guest: Ryan Kelly (Hennessy Funds):

  • Fed Chair Reaction: Markets like names viewed as likely to push rates lower faster, but the next Chair will remain largely data dependent.

    "I would suspect data is still going to be very important." —Ryan Kelly [43:43]

  • Midcap Investing:

    • Challenging as small caps rebound, but midcaps offer attractive valuations and acquisition appeal.
    • Hennessy’s Mid Cap 30 fund boasts strong 5-year average returns (19%) despite a tough YTD.
    • Success achieved without the “Mag 7” large-cap tech stocks.

  • Retail Focus:

    • Macy’s is a recent addition, benefitting from holiday optimism.
    • Wayfair’s stock is up ~150% YTD, seen as an AI beneficiary in e-commerce.

      “They’re potentially going to be one of the early adopters that really benefit from AI...to reduce costs for themselves.” —Kelly [47:44]

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Standout Quotes & Timestamps

• On potential new Fed Chair’s independence:

  “Supreme Court justices, Fed chairs... these people are generally pretty reputable that respect the value and the independence of the organization.” —Stuart Kaiser [03:44]

• On AI’s impact on web content creators:

  “You might end up in a future where AI is just building its answers off of [other] content created by AI...the information may not be as valuable or accurate.” —Sarah Frier [18:40]

• On China's automated cyberattacks:

  “The agents would simply come back occasionally and ask the operator, 'Is this what you want or would you like to do this instead?'...That came out of China and state-sponsored actors.” —Jennifer Eubank [33:45]

• On risk management for federal innovations:

  “...this is going to be a tremendously attractive target for adversaries.” —Eubank [35:35]

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Timestamps for Important Segments

• Fed Chair Hassett news & market reaction: [01:56–05:01]
• Market outlook, risks & data watch: [05:01–08:21]
• Alphabet AI, Google/TPU, and disruption to search: [10:49–22:32]
• Ukraine peace process and global alliances: [25:32–32:03]
• Cybersecurity threats and AI defense: [32:18–37:19]
• Investment perspectives, retail & midcaps: [40:22–48:56]

---

Conclusion

This episode delivers an in-depth look at several of 2025’s most pressing business, tech, and geopolitical issues—exploring how central bank appointments ripple through markets, what Alphabet’s AI renaissance means for the future of the web, how peace negotiations in Ukraine are shaped by an ever-shifting balance of power, and the escalating, AI-powered cyber arms race with China. Listeners come away with a sharper understanding of evolving risks and opportunities across markets, technology, and global affairs—plus a few practical takeaways on protecting both investments and personal data.

Transcript

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Bloomberg Audio Studios Podcasts Radio News this is Bloomberg Business Week Daily reporting from the magazine that helps global leaders stay ahead with insight on the people, companies and trends shaping today's complex economy. Plus global business, finance and tech news as it happens. The Bloomberg Business Week Daily podcast with Carol Massar and Tim Stenbeck on Bloomberg Radio.

[Tim Stenbeck]

Okay, well, let's talk about the big tech trade and where we go from here with our next guest who sees markets remaining unsettled with core leaders coming under pressure. We've got Stuart Kaiser with a set of equity trading strategy over at Citi. He joins us here in the Bloomberg Businessweek studio. We're going to talk tech, but just about two hours and 11 minutes ago, our Bloomberg News team broke a story about Kevin Hassett of the National Economic Council, White House Economic Council becoming the key emerging person who could become the next Fed Chair. We saw markets react. We saw yields on twos and tens move lower. We saw stocks go higher. What's your reaction to the possibility of a Fed Chair Hasset Look, I think.

[Stuart Kaiser]

Has it's been on sort of the short list with Kevin Warsh and maybe Rick Reeder and, and, you know, war maybe for a period of time now. So, you know, not too surprising that, you know, somewhat out of that core group is sort of being called the favorite. I'd probably tap the brakes on exactly knowing what the outcome here is because, you know, President Trump has tended to bounce around back and forth between the various candid candidates. But I think, look, I think Warsh has it reader are all considered, you know, very credible economists, you know, very, very deeply understand macro markets.

[Carol Massar]

Has it credible?

[Stuart Kaiser]

Yeah, I think, I think Hasset is from an economics perspective, on the credible side of things, without a doubt. And if that's the case, then, you know, you're, it's not too big an issue, you know, depending on who they settle from, from that group.

[Carol Massar]

But would Kevin Hassett be a good and independent Fed chair? He is certainly seen as somebody who would bring President Trump's approach to interest rates and cutting to the Fed, which President Trump has long wanted to control, at least according to those folks who we've been talking to in all of our reporting. And so maybe that is why he is coming out as the front runner. So I guess the question is, is, would Kevin Hassett be independent? Would he lower or raise rates based on the Fed's mandate and not on the President's preference?

[Stuart Kaiser]

I mean, you have to assume so. I mean, remember, Trump reported appointed Powell and now he doesn't consider Powell to be dovish enough. So, you know, I would say, you know, Supreme Court justices, Fed chairs, I mean, these people are generally pretty, pretty reputable that respect the value and the independence of the organization. And you would hope he's going to make decisions based on, on the incoming data. Clearly, a president is going to pick a chair that is consistent with their view. So, you know, it wouldn't surprise you that maybe Trump would settle on someone that, that skews a touch more dovish. But, but the fact is that whoever the chair is is walking into what's basically a split FOMC right now. That FOMC is also filled with 12 other people who are very reputable economists who are not simply going to be kind of pushed around and I think who are going to respect the data, respect the dual man. So it's not as if you're appointing someone that goes in and just, you know, makes the decision. Right. So again, I think all the three of the three or four of the core candidates, I think are pretty well respected economists. They're entering an institution which you would assume they would, you know, respect and support, you know, every Every chair is going to have a little bit of a hawkish or a dovish tilt or maybe a little more focus on inflation versus a little more focus on. Focus on. On the growth mandate. And that's fine. I don't think that that is. That that's particularly offsides or inconsistent with history. So, yeah, I mean, I think any of those core.

[Tim Stenbeck]

Let's talk markets.

[Sarah Fryer]

Yeah, let's talk markets.

[Carol Massar]

I mean, we just talked about, with our Ian King about what's going on in terms of Alphabet versus Nvidia, who wins, who not. I mean, Alphabet's been on tear this year too. I mean, it's up about 70% year to date. You do see the markets remaining unsettled with core leaders under pressure. How do you define unsettled when it comes to markets? What are you looking at and what does this mean? Maybe over the next six months, 12 months.

[Stuart Kaiser]

Yeah. I think unsettled is kind of what we've seen really for the last month or so, which is 4, 4 kind of key things have changed. In our view, that market's a little squishier. The first is that retail has pulled back considerably. And whether you believe or don't believe that retail is driving the market, certainly institutional investors are aware of that shift in supply demand. So again, that's created a little bit uncertainty. The reaction function of AI has clearly shifted, whether that is Meadow or Palantir or Oracle or Nvidia. And you can't ignore that. The third thing is retail. You know, retail earnings were soft and the commentary from managements was very, very cautious. We just got a pretty weak retail sales number as well. Regardless of all the rest of it, people are saying, wait a second, this US consumer has been the white knight of the economy and, you know, global economy for multiple years and now seems a little bit under pressure. And that last would be the Fed. Some uncertainty there. So not all of those.

[Carol Massar]

Uncertainty a lot.

[Stuart Kaiser]

Yeah. And in and of themselves, each one of these might not be an issue, but you put them all together and they've created some uncertainty. You're also in a tricky time of the calendar. You have portfolio managers who have portfolio managers, excuse me, have had a really tough year.

[Carol Massar]

Yeah.

[Stuart Kaiser]

If you're up year to date, you're not going to play hero ball between now and the end of the year as well. Well, so I think you've made people a little more cautious for a lot of reasons. So I think right now it's hard to have a really, really strong tactical view. You know, if we had to Pick one. We're going to pick higher into year end. We do think ultimately you get a rate cut and the seasonality pushes you there, but the risk reward around that is not nearly what it was a couple of months ago.

[Tim Stenbeck]

What changes your view between now and the year end where you'd say, actually we're not thinking higher till year end now?

[Stuart Kaiser]

Yeah, the data, you know, probably December 16th would probably be the single most important date in the calendar, which is going to be, you know, dual, dual payrolls reports. Our view is the unemploy rate is if you had to pick one thing is the single most important thing for, for the market. So that's going to be a very important day before we get there. You know, Black Friday, Cyber Monday will be important, but the single biggest day is December 16th.

[Tim Stenbeck]

And to remind everybody, that comes six days after we hear from Fed Chair Jay Powell and the entire Federal Reserve. The FOMC is going at this without the typical data that it has ahead of a Fed decision, 100%.

[Stuart Kaiser]

I mean, and you're also getting the inflation print on the 18th. So you could imagine a situation where The Fed cuts 25 basis points, tells you they're data dependent in 20, and then boom, you get hit with really weak labor markets the next week and vice versa. So I'm not saying, you know, either or is going to happen, but our view at this point is the logic behind the rate decision is as important as whether they cut or not. Right. If they don't cut, and it's because the labor market looks solid and the beige book very positive, that's good. If they do cut and the market's like, wait, you all look like you might be behind the curve a little bit because the next week we get weak labor markets less good. So really we are data dependent, probably meeting before we expected to be. But if you're asking what could change my view into year end to become more bearish, should be we get some weak holiday spending data and then that labor market report is unfriendly to the markets.

[Carol Massar]

Yeah, that would certainly do it. And because you'd be looking at both sides of the mandate right there for the Fed. Hey, Stu, thank you so much. Really appreciate it. Stu Kaiser, head of Equity trading strategy over at Citi.

[Tim Stenbeck]

Stay with us. More from Bloomberg businessweek Daily Coming up after this.

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[Tim Stenbeck]

Well, since the launch of Chat GPT3, can you believe it was three years ago?

[Carol Massar]

I'm like, I feel like GLP1 and AI are like all we've talked about in the last three years.

[Tim Stenbeck]

I guess there was an election in there too.

[Carol Massar]

There was. And there's wars and yeah, there's more stuff. But I'm just saying in terms of investment trends or theses, did you get chocolate for everybody? Wow, I love these.

[Tim Stenbeck]

I am not Mrs. Goodbar over here. Mr. She's holding up a bunch of Mr. Goodbye.

[Carol Massar]

They're so good. It's like a little bit of chocolate and peanuts.

[Tim Stenbeck]

Okay, well I'M off. I'm off track a little bit.

[Carol Massar]

You go to the west coast and they have really good, they do have.

[Tim Stenbeck]

Good snacks out there. That's where we find Sarah Fryer. She's Bloomberg News big tech team leader and the author of no Filter, the Inside Story of Instagram. She joins us from the Bloomberg San Francisco bureau. So, Sarah, the new AI software and deals with Google, the chip tie up with anthropic. We're talking about this because Google owner Alphabet shares are up more than 70% this year. The company's on track at a $4 trillion market cap for the first time. It really seems to be firing on all cylinders, whether we're talking about the cloud business, the multipurpose LLM, Gemini 3 and the new AI software. What's going on?

[Sarah Fryer]

We had this really big piece even just in the beginning of this year about how Google was this company that had failed to really capitalize on its own innovations. They were the ones that wrote the paper that spurred this technology that underpins large language models, which is like the basis of Chachi beatty. And when OpenAI launched, Chachi beat. Google could have done that months earlier and they didn't. And so they really have this reckoning at the company and haven't really been able to get their momentum until this year. And we're seeing it happen across all these dimensions of their business. Gemini is, is outperforming a lot of other models, especially when it comes to coding. TPU's, the chips that Google makes internally are really the only alternative to Nvidia's GPUs. They, they are transforming the Internet with the way they've put answers in search. They are now probably most consumers first brush with AI if they haven't already downloaded ChatGPT, they see those Google AI answers at the top. So they're becoming the cultural leader in AI as well. So I think that there are a lot of really interesting things happening for this company that have come to fruition this year. The company seems to be shipping products faster and doing it in a way that is high quality. You have other companies like, like Metta, which seemed to be a leader in the race when it was first getting started, but have since lagged behind Google's opposite. They're gaining momentum, they are gaining share, and that is what investors like to see.

[Carol Massar]

Why is it though? Why does it feel like it was so under the radar? Like I always feel like when, when enduring earnings seasons. We've talked about how, you know, Alphabet, Google has so many different platforms. They have Data like they can really, it seems like monetize for search. It's where we all go for search. But it just feels like they've just come out of nowhere.

[Sarah Fryer]

You know, they've come out of nowhere. But, but don't forget that they started this. I know intellectually they started this and then they were unable to capitalize on it. So a lot of people kind of wrote them off as like this bureaucratic, you know, stuck in its ways. Big tech company that, that really couldn't be expected to move at the pace of, of Chachi Beatty, of Claude and, and yet they have been able to do that. And so the tipping point is sort of happening now where we're starting to wonder does this mean that corporate customers that have started to sign these big deals with, with Anthropic and OpenAI, are they going to be seeing Google as a, as a better pick because they have this longer history? It is a little, seems a little bit safer. So there are all sorts of things that can happen at this tipping point. Also with TPUs, the big deal that anthropic had with TPUs, we're now you seeing the information just reported that Metta wants to have Google's TPU's in its data centers. So a major competitor accepting Google's innovations to run its products. It is a, it is a big, it is a big deal.

[Tim Stenbeck]

Yeah, the, a big part of the narrative today is, you know, Nvidia shares after this report from the information took a hit, they're still down 3.2%. They were down as much as 7%, Alphabet shares higher earlier in the session. But the question I have for you, and we don't know what this does to a private company like OpenAI of Chat GPT fame because it's a private company. Does Gemini, is Gemini coming for Chat GPT?

[Sarah Fryer]

Oh, yeah, yeah, absolutely. I mean I don't think that, I don't think that it's coming for it in terms of like it'll, it'll cause it to fade or anything like that. But I think that the youth case, the idea of, of, you know, I have a question to ask and I'm going to go ask AI for that answer. People are doing that with, with Google search already naturally when they have questions, it's hard to move that behavior all to ChatGPT and OpenAI has been very successful at doing that over time. But if Google already has the ability to answer the questions with as much, you know, accuracy innovation, etc. Then, then people may not make that switch. So so it's definitely going to be hard for, for the upstarts to battle with Google, but it's also going to be, I don't think we should write them off because this is such a fast moving market. Right. Still very early in. So it's too early to say, oh, Google's just going to win it all there. It's still very much depends on their continuing to execute, continuing to get product out faster than rivals. And those things change by the day.

[Tim Stenbeck]

But it does seem like there is an incumbency advantage when it comes to Google and the way that it's reshaped its own search. And BusinessWeek has written a lot about this, but I, to be honest, I haven't played with it much until recently. So if you do a traditional Google search, you can, you know, see the overview, which I think answers a lot of people's questions, but then you can just click. And this is on a desktop. You can say, dive in deeper with AI and then it looks Carol, like an LLM, like exactly like something like it is.

[Sarah Fryer]

Yeah, it is.

[Tim Stenbeck]

Yeah. It's pretty remarkable. I mean, if people are changing their behavior, Sarah, with search and going to chat to ask questions, what's to stop them from just using Google and Google's AI mode if it's as good as OpenAI's chat GPT?

[Sarah Fryer]

Well, I think, I think there are some who say it's also a dangerous game because search is Google's big moneymaker. It is the place, it is the engine for the entire company. And as Google directs more people to AI answers, overviews, and diving deeper in AI mode, that means traffic has diverted away from websites and towards AI answers. And then it can actually cause the entire Internet to crumble in a way because the people who are creating information that goes on the Internet don't get to pay their bills anymore. And we have a really interesting story out today on that effect with what else? Thanksgiving recipes, where these recipe bloggers that have built up a business over many years telling people how to make their turkey, how to make their crystals, Christmas cakes are not seeing that traffic anymore. It's going to AI. So they're not, they're not too confident about continuing to do this kind of work. And then you might end up in a future where AI is just building its answers off of content that is created by AI. And then we're in a place where the information may not be as valuable or accurate.

[Stuart Kaiser]

Okay.

[Tim Stenbeck]

I love this story from your team, by the way. We're speaking with Sarah Fryer, right Now she's Bloomberg News big tech team leader. She's the author of no Filter, the inside story of Instagram, the team, her team out and she edited this story. The story that you're referring to. Sarah Slop recipes are taking over the Internet and Thanksgiving dinner. I mean, I think we've all been there in recent years where we've noticed that if you're looking up a recipe online and going to the actual website, you have to basically read some sort of like novel or memoir.

[Sarah Fryer]

As Carol also, by the way, that was, that was for search engine optimization that people would write their entire life story before posting a recipe because Google was more likely to index pages that had longer text content, which was. So we can also blame Google for that. But yes.

[Tim Stenbeck]

So now, I mean, what people are doing is they're like just doing like, show me a slow cooker recipe for butternut squash soup. You know, and chat GPT just comes up with it. And you don't have to read anything about the life story.

[Sarah Fryer]

Right?

[Tim Stenbeck]

And that's an issue. Where does that information come from?

[Sarah Fryer]

An issue. It's an issue, but it's also like, maybe they're going to tell you to put like horseradish in your butternut squash soup. You know, make it, mix it up, make it a little weird. AI is usually doing it could be good. But what AI is usually doing is, is cribbing from multiple websites at once creating what these AI recipe bloggers call Frankenstein recipes that may not actually work. And one of the creators told us that Google mixed up one of her cake recipes and told people to cook this six inch cake for three to four hours. You'd get charcoal, right? Another food blogger told us I was having people put sauce on tamales while the husks are still on. You don't want to eat those husks. You're wasting a lot of sauce by doing that. So, so the AI is, is, is, you know, presenting these, these great images to novice cooks saying, look at your beautiful future results with this recipe. But the recipe doesn't actually create that glossy image. And, and people are, are getting led astray. So beware before you make your Thanksgiving cooking plans.

[Carol Massar]

Yeah, it's.

[Tim Stenbeck]

My wife gives me such a hard time. She's like, I feel like you're at.

[Carol Massar]

It all the time, aren't you?

[Tim Stenbeck]

Well, she's like, like, she's like, what recipe are you using? And I'm like. And she's like, do not use chat GPT. She's like, we have a subscription to the new York Times, you know, cooking and everything. And it's like, it's great.

[Carol Massar]

Well, you know, I just went into Google and I was like, what's the best recipe for pecan pecan pie? Because it's like my favorite. And it actually came up with and then I said take out corn syrup because I don't want to use corn syrup. And it came up with the recipe, I think from the New York Times, which I really like to use.

[Tim Stenbeck]

Does it link to it?

[Carol Massar]

That's a good question. I have to see if it's linking to it. Hey, 30 seconds. Does Google Alphabet though have an advantage? Sarah, because we're all on Google search. They have so much data on their platform and years.

[Sarah Fryer]

I mean they have, they have this history of indexing the entire web and we have this history of going to Google for anything we want to know. So if you're in this, this economy that's going to be driven by people getting answers on their questions faster, Google's a really great place to start. And they're starting to really take over in other aspects of the market that we didn't expect would necessarily be successes like TPUs.

[Carol Massar]

All right, good stuff. And note to everybody, do not Google recipes for Thanksgiving.

[Tim Stenbeck]

She just got the tpu, the processing unit in there at the end.

[Carol Massar]

Sarah Fire, Bloomberg News Big Tech Team Leader. This is Bloomberg.

[Tim Stenbeck]

Stay with us. More from Bloomberg Businessweek Daily coming up after this.

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[Carol Massar]

While the white House signaled optimism around efforts to negotiate a peace deal excuse me, between Ukraine and Russia, while warning that additional negotiations to address remaining sticking points would be necessary. Despite reports earlier suggesting Tim a deal was afoot.

[Tim Stenbeck]

With an update on this and more, back with us is Jennifer Welch, Chief Geo Economics Analyst at Bloomberg Economics. She joins us from The Bloomberg Washington, D.C. bureau. Jenny Bloomberg Economics out with a new report. It notes that the US Ukraine policy whiplash is benefiting Moscow. What do we know?

[Jennifer Welch]

So it's been quite the roller coaster for the last few days. What emerged last week was a plan that seemed to be negotiated between the US And Russia, largely favorable to Moscow in terms of, for example, capping Ukraine's military, ensuring that it would never be a part of NATO in return for pretty ambiguous security guarantees. Since then, there's been a scramble by Ukraine and its European partners to engage Washington and try and alter those terms, and now looks like at least nine of the points from that original 28 point peace plan have been adjusted or removed, including some of the ones that Ukraine felt crossed its red lines. And where things stand is finalizing those terms and then pitching them back to Moscow. But our assessment is that that Russia is unlikely to receive in a positive way those altered terms based on how things have gone earlier this year in prior rounds of negotiations.

[Carol Massar]

Wait, so you know what I keep thinking? Who's calling the shots of a possible truce? Is it us, Is it Europe? Is it Ukraine? Or is it President Putin of Russia? Or maybe a little bit of all of them?

[Jennifer Welch]

Or who even in Washington is involved in this? Is it seemed last week when this plan first emerged that some members of the President Trump's own administration weren't even entirely sure where this peace plan came from and whether it had been fully coordinated and agreed to by the US Side. But then it quickly moved from that to the US Setting an ultimatum on Ukraine to agree to it. And now we're renegotiating the terms of it. So it's been a lot of twists and turns here, but this isn't an entirely new story. This is something we've seen earlier this, this year. If you think back to August, when President Trump met with President Putin and then immediately rushed into a summit with Ukraine and European allies, this feels very much like a familiar pattern and one I think is likely to produce the same outcome, which is no peace plan.

[Tim Stenbeck]

Well, okay, so on that, European allies, sort of another group here that we need to focus on. What do they want?

[Jennifer Welch]

I think European allies are primarily concerned about first making sure that this deal isn't so heavily weighted in Moscow's favor that, for example, it doesn't end up preserving peace for the long haul. That, for example, it leaves Ukraine in a weakened position that could allow Moscow to just reconstitute its forces and re attack. That not only has implications for Ukraine's security, but ultimately for Europe's. So that's going to be a major area of concern. Second, major area of concern is one of the elements of that original peace plan was around the frozen Russian out assets and how they would be leveraged and in particular how they might be leveraged to essentially pay the US Back for security commitments to Ukraine. That's something that Europeans have a stake in as well. And they would want to have a say in how those frozen assets are used, particularly as they're debating internally whether or not to use them to support Ukraine in the short to near term.

[Carol Massar]

Hey, Jenny, I want to move on to US China, but One last question. Is there still a feeling here in the United States and obviously elsewhere in Europe? I think Europe, it's a safe. Yes, but here in the US that if this is a much more favorable agreement to President Putin that he may in another few years, you know, create another war and go after another land grab. I just wonder how much of that fear is still out there.

[Jennifer Welch]

I think that's certainly a concern among foreign policy analysts, especially having watched Putin play this playbook before. We saw with Crimea back in 2014, he played out the peace process. He drew out negotiations and pretended to be genuinely interested in peace. And then he essentially snagged and pocketed the results of that peace process, reconstituted his forces and launched a full scale assault on Ukraine just years later. And I think certainly leaders in Europe and Ukraine, but also in the United States, many are concerned, concerned about the possibility of that happening again.

[Tim Stenbeck]

So in terms of just thinking about possible endings for this, as we do get close to the fourth year of this conflict, what would an end look like that Russia would be okay with and Ukraine and Europe would be okay with?

[Jennifer Welch]

It's hard to see at this point a potential compromise position because Moscow seems to be betting on more battlefield gains and essentially seeing that time is on its side. It really doesn't have an incident incentive to negotiate for peace because it thinks it can just continue to win territory. The West's support for Ukraine will continue to dip. Ukraine will continue to have some of the internal issues we're seeing, like with corruption scandals and losing political domestic unity, and it will just have to bide its time and continue to push for the offensive. I think what could change Moscow's calculus is stricter Western sanctions that bring some of its economic troubles more to the forefront. That might press it into a position where it realizes it's not a war that it can continue to afford.

[Tim Stenbeck]

And just to clarify, we're in the fourth year. It'll be four full years of this war in February.

[Carol Massar]

Yeah, I mean, it's just even hard to believe that that's where we are. Hey, I want to just quickly one question to you on U.S. china. President Trump, we know, held back to back calls with the leaders of China and Japan. We've seen escalating tensions over Taiwan threatening to derail his weeks old trade truce with Beijing. It over always feel so fragile, that relationship, US And China always complicated. Will a US China truce last?

[Jennifer Welch]

I think my prediction is for the short to near term, again with President Trump, you kind of always have to have an asterisk because you don't really know exactly what he's going to do. But my prediction is at the moment, yes, I think it will last. I think the Trump administration is very focused on maintaining it. I think the calls that we saw yesterday were more about an effort to manage the this China, Japan feud and avoid drawing the United States into it and avoid it upsetting that existing truce. I think the questions that we have for the longer durability of that plan are things that are, for example, outside the scope of that truce, actions by Congress that Beijing could see as violating the spirit, if not the letter of the truce, actions that the US Might take as sort of its normal export control policy updates that might violate it. So there are definitely a lot of potential speed bumps in the future for this truce. But at the moment, Washington seems very focused on maintaining it and keeping it in place.

[Carol Massar]

All right, going to leave it there. Hey, Jen, thank you so much. Jenny Welch, she's chief geo economics analyst at Bloomberg Economics. All right. Geopolitics, relationships among allies and friends between enemies. I mean, this makes me think about cybersecurity and national security issues.

[Tim Stenbeck]

Well, the recent Bloomberg opinion piece by the editors wrote, america's enemies are growing bolder and more sophisticated in cyberspace. Carol. To fend them off, the government must stop unilaterally disarming.

[Carol Massar]

All right, so we want to get into the state of readiness when it comes to cyber threats. Keep in mind that we've had two recent reports underscoring some of the danger that's out there. Mid October, Seattle based cybersecurity firm F5 acknowledged a catastrophic breach of its systems which may have allowed Chinese hackers to penetrate networks used by federal agencies and Fortune 500 companies. There's, of course, other stuff that has happened as well. Back with us is Jennifer Eubank. She's founder of Adamant Strategic Advisors. She advises companies and clients on cyber resilience, digital transformation, geopolitical risk. She is a former CIA deputy for digital innovation. She joins us from Virginia. Jennifer, good to have you back with us when it comes to the most urgent national security and tech issues. And I want to go with China right now. Is it threats from China? Is it threats from Russia? I mean, like, what is it in terms of the United States?

[Jennifer Eubank]

Great to be back with you, Carol and Tim, thank you. If we're talking about cyberspace, it's really about the People's Republic of China. Of course, Russia remains a very active actor in cyberspace. We can see that in Ukraine. We can see that regionally and occasionally here in the us but in terms of sophistication, scale and ambition, it's really all about China right now.

[Tim Stenbeck]

How sophisticated has China gotten?

[Jennifer Eubank]

Incredibly so. You may have seen a report came out recently from Anthropic where they documented the first essentially AI powered cyber campaign from inception to exfiltrating data that was almost exclusively conducted by AI agents. The agents would simply come back occasionally and ask the operator, is this what you want or would you like to do this instead? Do you like that? And 80, 90% was automated and that came out of China and state sponsored actors.

[Tim Stenbeck]

I don't love this, Carol.

[Sponsor/Ad Voice]

Okay.

[Tim Stenbeck]

No, you know, it's not, it's not like the people who are doing the infiltrating have to be only so smart. Right? And you only have to outsmart them. Now we have to outsmart the machines.

[Carol Massar]

God, that's terrifying.

[Tim Stenbeck]

Don't love this. Yeah.

[Carol Massar]

How do we keep. Wait, go ahead.

[Jennifer Eubank]

Oh, no, I'm just going to say it really does signal a major shift. Right. We all knew this was coming. At least those of us in cyber realm knew that this was coming. When you see the confluence of AI and cyber, you knew we'd be facing this. And so really we have to be in a position where machines could start fighting and defending against machines. There's a certain risk in that as well because machines are not humans. They don't exercise our judgment. All sorts of things can maybe go awry. But as a start, we're just going to have to be bringing more AI into our cyber defenses if we are going to actually harden our perimeters and protect our data.

[Carol Massar]

Yeah, go ahead.

[Tim Stenbeck]

No, no, please.

[Carol Massar]

Well, I was just thinking about President Trump signing that executive order yesterday. Genesis mission. It's a federal effort to boost innovation using AI. And so it's all about promoting a technology and its adoption as more AI is incorporated into the US government, all governments, I mean, does that just increase the cyber risks or does AI also help us fight these risks tasks?

[Jennifer Eubank]

It's both. It's like any new technology. It's both SHIELD and sword. It's both. And yesterday's announcement is actually pretty, pretty exciting in a way because it represents a moment where the administration is trying to, let's say, bet big on AI's ability to help us discover new breakthroughs in all sorts of various scientific fields. Not specifically about cybersecurity, but about quantum and, and biotech and space and lots of other things. And so one of the issues, and I'll tie that back to cybersecurity, one of the things that people are going to be watching with that effort is how do we protect the data? Because this is going to be a tremendously attractive target for adversaries. If you're talking about bringing together our national labs, supercomputing capabilities, sensitive federal data sets on science, and then America's leading technology companies, that's going to be right in the crosshairs of our adversaries targeting.

[Tim Stenbeck]

So then what is the right way, just very briefly, to protect this data?

[Jennifer Eubank]

Oh well, I think, you know, they're going to have to be locking down in every possible way they can and kind of the chapter and verse on that will have to be worked out because this is all still information at the moment. And I think people are going to be watching to see how the Department of Energy implements this, this intention, this, this order if you will. So lot to be determined.

[Carol Massar]

Right now I'm just going to unplug everything and throw out my phone. How's that work? Is that okay? Does that enough or that's not enough?

[Jennifer Eubank]

Okay, One real pro tip. Put multi factor authentication on any account that will allow it and that will stop virtually all nefarious activity on and.

[Tim Stenbeck]

You need your phone for that, Carol.

[Sarah Fryer]

Sorry to tell you I do, I do.

[Tim Stenbeck]

Don't throw it away.

[Carol Massar]

Jennifer Eubank, Always good to catch up. Founder of Adam and Strategic Advisors Former CIA Deputy for Digital Innovation Stay with us.

[Tim Stenbeck]

More from Bloomberg Businessweek Daily coming up after this.

[Sponsor/Ad Voice]

Support for the show comes from public.com you're thoughtful about where your money goes. You've got your core holdings, some recurring crypto buys, maybe even a few strategic option plays on the side. The point is you're engaged with your investments and Public gets that. That's why they built an investing platform for those who take it seriously. On public you can put together a multi asset portfolio for the long haul. Stocks, bonds, options, crypto. It's all there. Plus an industry leading 3.6% APY high yield cash account. Switch to the platform built for those who take investing seriously. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing. All investing involves the risk of loss including loss of principal. Brokerage services for U.S. listed registered securities options and bonds in a self directed account are offered by Public Investing Inc. Member FINRA and SIPC. Crypto trading provided by ZeroHash Complete disclosures available at public.com disclosures Introducing the all.

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New Adobe Acrobat Studio now with AI powered PDF spaces do more with PDFs than you ever thought possible. Need AI to turn 100 pages of market research into five insights with a click. Do that with Acrobat. Need templates for a sales proposal that'll close that deal? Do that with Acrobat. Need an AI specialist to tailor the tone of your market report to sound real smart in real time? Do that with the all new Adobe Acrobat Studio. Learn [e-mail] do that with Acrobat. The Chase Inc. Business Premier card is made for business owners who make things happen. Designed for high spend and limitless cash back ink, Business Premier is a painful card with built in flexibility. Get the buying power you need to make large purchases, cover unexpected expenses and help your business grow. Earn a total of 2.5% cash back on every purchase of $5,000 or more, plus earn unlimited 2% cash back on every other purchase, giving you unlimited earned potential to invest cash back into your business. From innovation and technology to everyday expenses, Inc. Business Premier is the only business credit card with 2.5% cash back on every purchase of $5,000 or more and is part of a suite of credit cards from Chase for Business designed to meet your needs every step along the way. Learn [e-mail] businesscard Chase for Business make more of what's Yours Accounts subject to credit approval restrictions and limitations apply. Cards are issued by JPMorgan Chase Bank NA member FDIC.

[Producer/Host Announcements]

You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.

[Tim Stenbeck]

Daddy, can I drive?

[Carol Massar]

Yeah, sure, why not? Do I look like I drive a minivan?

[Tim Stenbeck]

Shut up and drive. Don't drive angry. Don't drive angry.

[Stuart Kaiser]

I'll drive shotgun.

[Producer/Host Announcements]

This is the drive to the close.

[Carol Massar]

If you had access to a car.

[Producer/Host Announcements]

Like this, would you take it back right away on Bloomberg Radio?

[Carol Massar]

All right everybody, we are just about 18 minutes away from the closing bell on this Tuesday. Carol Massar, Tim Stanback live in our Bloomberg Interactive Broker Studio. Just looking at the trade. I mean we are, Tim, pretty much at our highs of the session when it comes to the equity trade. We just heard from Amy Morrison, Bill Maloney and I'm looking at most about eight of the major eight of the eleven major industry groups in the S&P 500 are higher today. One is unchanged. Information tech is flat. Unchanged. Health care is at the top 2.2% to the upside. Consumer discretionary up nearly 2%. That might be because of some of those retail names, consumer staples also doing well, one and a half percent at the bottom of the pack. You've got utilities and energy both down about 4, 10 of a percent.

[Tim Stenbeck]

How about those small caps?

[Carol Massar]

I know you keep looking at those. Yeah, they're getting ready for Romaine because, because he loves that small.

[Tim Stenbeck]

Does he like small caps?

[Carol Massar]

He does.

[Tim Stenbeck]

Okay. Well, they're up 2.3%. It's the biggest gain in a single day for the Russell 2000, going all the way back to Friday when the Russell 2000 was up to.

[Carol Massar]

Drumroll, please.

[Sponsor/Ad Voice]

No, no needed.

[Tim Stenbeck]

Let's see what Ryan Kelly has to say about this. He's chief investment officer and portfolio manager at Hennessy Funds. He joins us from Chapel Hill, North Carolina. We did see a real shift in the trade, I think conviction is fair to say after we, after our colleagues at Bloomberg News reported that Kevin Hassett is the frontrunner for the new Fed chair to be new Fed chair picked by President Trump. I'm just curious about how you view a development such as that. And look, we should note that the president has not made a final decision and the treasury secretary did say that a decision could happen by Christmas. So about a month away at this point. How do you view a name like him? Ryan?

[Ryan Kelly]

Well, thanks again for having me on with you guys. Good to see you.

[Stuart Kaiser]

Yeah.

[Ryan Kelly]

Big development today. Obviously, there's been different names being thrown around for the next Fed president. This is somewhat expected. Kevin was already in the front running for this, but he really is, he does promote a lot of what the president would like as far as interest rates, namely having them go lower faster. So I think that this is obviously going to be, at least for a stock market, a pretty, a pretty positive development. And we saw that change, you know, midday today.

[Carol Massar]

Is that because you assume that he is going to be pushing for more rate cuts, even if policy or even if mandates, be it in the labor market or for inflation. Administration tell him otherwise or no. Do you assume that he will be like other Fed chairs if indeed he gets that position, that he will look at the data and do what's best for US Monetary policy?

[Ryan Kelly]

Well, really, that's probably the biggest question out there and it's a great question. How will he actually push the Fed if he ends up being the Fed president? So much of this current Fed and what we've had for the last few years has been been very data dependent. It looked like we weren't going to have potentially a rate cut this coming December, you know, just a couple weeks away that has changed pretty dramatically. It looks like probabilities are up in the 70 or 80% that that's going to happen when we start to see some of this data coming out. So you know, will the new, will a new president of the Fed work any differently? I would suspect data is still going to be very important. It has to be, it has to drive that. But there's always some influence as well and you could see that potentially come into play as well.

[Carol Massar]

Hey Ryan, I want to talk about your universe, the mid caps, your Mid cap Hennessy Cornerstone. Cornerstone, excuse me, Mid Cap 30 fund, which year to date down about one and a quarter percent putting it at least according to Bloomberg data, in the 16th percentile against your peers. Go back five years and on average annually you've returned almost 19% putting it in the 99th percentile. Is it hard being a mid cap investor right now?

[Ryan Kelly]

It is. And it's funny you just mentioned small caps doing very well today. Small caps have definitely outperformed. When we start to hear more about potentials for rate cuts coming off some of the bottoms near the beginning of the summer till now they performed a lot better than mid caps. It is a tougher space. Valuations are much cheaper in the mid cap space. These are companies that are for many reasons we really like them. They're big enough to have a good track record. They're big enough to still be able to grow organically and yet also be attractive to larger buyers to actually move the needle and then they can also acquire as well. And we have seen a lot more M and A in the space this year. But yeah, as far as this fund goes, this year is not as relatively a good performance that we've had. But the five year numbers kind of speak for themselves and that's that we are patient. We will have some years that we're sort of out of favor and our potential style just doesn't work as well. But that five year number which is, you know, we're pretty proud of, the great thing about it is we got there without any AI, without any, you know, Mag 7, without any large cap tech. And actually, you know, that's, I just, we like to tell investors that you can make money outside of just the Mag 7.

[Carol Massar]

Well, let's talk about it because you know, retail is certainly front and center right now because they've all been reporting earnings. Macy's, it's a big week, right? We've got the Macy's Thanksgiving Day parade. You've got Black Friday. That's a big Deal for them, certainly. And as it is for other retailers, they do report earnings next week. Stock is up almost 30% year to date. That's a big holding for you and you continue to hold it.

[Ryan Kelly]

Yes, absolutely. We do have, traditionally in this fund, we do have a lot of industrials and consumer discretionary type companies. We do have a lot of the traditionally, you know, sort of your mainstay brick and mortar type retail stores. Macy's has done well. It's done well for us since it's actually a new purchase since September. I think it's up about 25% since that time. And you know, they always, not always, but a lot of times going into the holiday season, you see a lot of these retail, even the traditional ones really move as we start to get more data coming out for Black Friday and for Cyber Monday. So we'll be keeping an eye on that. On that for sure. We also own Wayfair, for instance.

[Tim Stenbeck]

Yeah, I was just going to bring that up.

[Ryan Kelly]

Yeah, that's a very different company.

[Tim Stenbeck]

We speak to the CSO quite frequently. Kate Gulliver.

[Ryan Kelly]

Yes, absolutely. So this is a very different company, you know, nowhere near as heavy in the storefront space. And they're really, they're potentially going to be one of the early adopters that really benefit from AI in using AI to help them make their business better, be able to get to customers, you know, in a more effective way, potentially to reduce costs for themselves. So that has been what's also moving the stock as well as it's just, you know, performing pretty well this year.

[Tim Stenbeck]

Yeah, 148.5% performing pretty well as an understatement. But you know, I'm not editorializing. Go ahead, Carol.

[Carol Massar]

Listen, 16% of the float is short. Is there any reason, reason to take some money off the table or how long have you owned it? And forgive me, just about 20, 25 seconds. Just real quick.

[Stuart Kaiser]

Sure.

[Ryan Kelly]

So this fund, we will own stocks for about a year. That's our time horizon. We just added this in September.

[Sarah Fryer]

Okay.

[Ryan Kelly]

You know, there's still, I think, a lot to play out here. So. No, we wouldn't be getting rid of it anytime soon.

[Carol Massar]

All right. Always love to talk names with you, Ryan. Have a great Thanksgiving holiday and hopefully we talk to you real soon again. He is Ryan Kelsey, Chief Investment Officer Portfolio Manager at Hennessey Funds.

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[Carol Massar]

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