Dec 16 Global Financial Headlines: Berlin Talks Yield Progress, Territorial Disputes Remain Key; Hassett's Fed Chair Prospects Waver; Tesla Surges Over 3% to Annual High

Key global financial headlines from overnight and this morning include:

1. **US Proposes Substantial Security Guarantees for Ukraine, Territorial Issues Remain Sticking Point** The US presented more substantive security guarantees during peace talks with Kyiv, though the move appears aimed at pressuring Ukrainian President Zelensky to concede on territorial disputes. A US official revealed the Trump administration offered NATO Article 5-style mutual defense assurances but provided no specifics. German Chancellor Merz called the proposal "impressive," stating a pre-Christmas peace deal "depends entirely on Russia."

2. **Hassett's Fed Chair Bid Loses Steam as Trump Allies Rally Behind "Another Kevin"** Sources indicate influential figures close to President Trump oppose NEC Director Kevin Hassett as Fed Chair due to concerns over his perceived closeness to Trump—ironically the trait that initially made him a frontrunner to succeed Powell. Opposition has coalesced around alternative candidate Kevin Warsh. Hassett's prospects reportedly dimmed in December amid fears his appointment could trigger bond market volatility if investors view him as overly aligned with Trump.

3. **Musk Confirms Austin Fully Driverless Robotaxi Testing Underway; Tesla Shares Rally** Nearly six months after launching limited Robotaxi services with safety drivers in Austin, Tesla announced it is now testing completely unmanned vehicles. CEO Elon Musk confirmed via X: "Testing ongoing—no humans inside." Tesla Motors closed up 3.5% at $475.11, now just 1% below its December 2024 all-time high after an 18% YTD gain.

4. **JPMorgan Debuts First Ethereum-Based Tokenized Money Market Fund** JPMorgan Asset Management launched MONY (My OnChain Net Yield Fund), a private fund for qualified investors that earns yield via blockchain-held tokens, supported by its Kinaxis Digital Assets platform. This marks Wall Street's deepening foray into tokenizing traditional assets (stocks, bonds, private loans) on blockchain, a sector gaining momentum post-US Genius Act's stablecoin regulatory framework.

5. **Trump: Ukraine Conflict "Closer Than Ever to End" After Latest Talks** Following discussions with European leaders including Zelensky and counterparts from Germany, Italy, Finland, France, and the UK, Trump stated at a White House event: "We're closer than ever to a deal to end this conflict."

6. **Dissenting Fed Governor Milan Says "Core" Inflation Nearing Target** Governor Stephen Milan reiterated his view that current restrictive policy is unnecessary, citing his moderate inflation outlook and labor market warning signs. He expects housing inflation to ease as rent growth normalizes post-pandemic, with cooling labor markets preventing service-sector inflation (ex-housing/food/energy) from rising. Portfolio management fees and similar drivers reflect statistical anomalies rather than consumer price experiences, he noted.