Key global financial headlines from last night to this morning include:
1. Trump Prefers Warsh or Hassett to Lead the Federal Reserve 2. Fed Officials Debate Whether Rate Cuts Could Undermine Inflation Fight 3. Oracle Delays Completion of Some OpenAI Data Centers to 2028 4. Broadcom Plummets, Following Oracle’s Footsteps, Disappointing AI Investors 5. Trump Plans to Ease Marijuana Restrictions, Boosting Cannabis Stocks 6. Fed’s Paulson: Labor Market Risks Outweigh Inflation, Policy Remains Tight
**Trump Favors Warsh or Hassett for Fed Chair** Former U.S. President Donald Trump stated he would prefer former Fed Governor Kevin Warsh or ex-National Economic Council Director Kevin Hassett to lead the Federal Reserve next year. Trump emphasized that the next Fed chair should consult with him on interest rate decisions. "This practice has faded, but it used to be common. It should be revived," Trump said. "That doesn’t mean they must follow my advice, but my perspective is worth considering."
**Fed Officials Clash Over Rate Cut Risks to Inflation Credibility** Federal Reserve officials reiterated the contentious nature of this week’s rate cut, with some arguing for further easing if the labor market weakens, while others warned it could jeopardize hard-won progress on inflation. The Fed voted 9-3 to lower the benchmark rate by 25 basis points to 3.5%-3.75%, marking the first triple dissent since 2019. Kansas City Fed President Schmid, one of the dissenters, opposed the cut, citing insufficient evidence that rates are effectively curbing inflation through slower economic activity.
**Oracle Delays OpenAI Data Center Completion to 2028** Oracle has postponed the completion of some data centers for OpenAI from 2027 to 2028 due to labor and material shortages, sources revealed. Oracle’s shares closed down 4.5%, after dropping over 6% intraday.
**Broadcom Plunges, Disappointing AI Investors** Chip giant Broadcom, competing with Nvidia in AI computing, saw its shares tumble 11%—the steepest drop in 10 months—after its AI revenue forecast fell short of lofty investor expectations. CEO Hock Tan disclosed a $73 billion AI backlog over six quarters, calling it a "floor," but the figure still disappointed some.
**Trump Plans to Reclassify Marijuana, Lifting Cannabis Stocks** Trump is expected to direct his administration to reclassify marijuana as a lower-risk drug, potentially marking one of the biggest shifts in U.S. cannabis policy in decades, sources said. Discussions involved industry executives and health officials, though no final decision has been made.
**Fed’s Paulson: Labor Risks Eclipse Inflation, Policy Stays Tight** Philadelphia Fed President Anna Paulson predicted cooling inflation in 2024 but flagged rising labor market fragility. "Labor market weakness concerns me more than inflation upside risks," she said, noting tariff impacts on prices should fade by mid-2024. Paulson described hiring as concentrated in healthcare and social services, signaling broader softness.
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