The race could be over. President Donald Trump looks set to choose his economic adviser Kevin Hassett as chair of the Federal Reserve, barring any last minute fallout. And while knowing the likely identity of the next central bank chief provides some certainty for markets, it can also cause volatility.
Hassett has emerged as strong favorite to replace current Fed Chair Jerome Powell in recent weeks. The latest evidence is that the White House is canceling planned interviews with the small group of finalists for the
role, according to The Wall Street Journal. Prediction markets now put Hassett’s chances at more than 80%.
The candidacy of Hassett hasn’t shocked the markets. He is aligned with Trump’s wishes for lower
interest rates, recently saying he would help Americans get “cheaper car loans and easier access to mortgages.” But he is also an establishment conservative economist, who advised George W. Bush and John McCain. So far the ‘Hassett trade’ has only resulted in a marginally weaker dollar and some more appetite for risky assets—good news for crypto and AI-related stocks.
But having Hassett identified as the next Fed chair well before Powell’s term expires next May could cause instability. Will markets listen to the current chief or his successor for guidance? Will
investors trust Hassett to resist political pressure to lower rates in the face of inflationary risks? Economists at UBS note that inflation has not been at the official Fed target of 2% since the start of 2021, and there’s a risk households and businesses might start behaving like the unofficial goal is 3%, opening the door to spiraling prices.
As the co-author of the poorly timed ‘Dow 36,000’ in 1999—an ill-fated prediction of stock market gains just before the dot-com bubble burst—Hassett has experience of market overexuberance. Long-term investors will
have to hope he has learned the lessons of the past and fights for the independence of the Fed if he is named chair.
—Adam Clark
***What’s Ahead for Markets in 2026? From “Liberation Day” tariffs to torrid
rallies in AI stocks and gold, this year has been full of surprises. Join us on Dec. 11 at noon for discussions with investment strategists and money managers about the outlook for the economy and markets in 2026—and how to position your portfolio for success. Sign up here.
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As Amazon Announces AI Chips, Nvidia Defends Its Ground
In a challenge to AI industry leaders Nvidia and Alphabet-owned Google’s custom chips, Amazon said its newest artificial-intelligence Trainium 3 chips are now available. Amazon has focused on developing its own chips to avoid becoming too dependent on costly hardware from Nvidia.
- Amazon said UltraServers powered by up to 144 of its in-house Trainium 3 artificial intelligence chips offer more than four times the computing performance to train larger AI models faster and serve more users at a lower cost than its previous generation.
- AI start-up Anthropic said it expects to be using more than one million Trainium 2 chips by the end of 2025, including its Project Rainier supercomputer with nearly 500,000 Trainium processors. J.P. Morgan analyst Doug Anmuth expects Amazon Web Services to expand access to more customers.
- Nvidia is battling AI challengers on multiple fronts, but CFO Colette Kress said it is “absolutely not” losing market share to the Tensor Processing Units developed by Alphabet’s Google. Instead, Nvidia’s customers are staying on its platform and most Nvidia chips are going into new data centers, she said.
- Nvidia continues to strike deals to expand its reach. This week, in addition to Monday’s announcement of a $2 billion stake in Synopsys, it has teamed with Hewlett Packard Enterprise on an AI Factory Lab in France and with Japan’s industrial robot maker Fanuc to develop AI robots.
What’s Next: OpenAI urged staff to improve ChatGPT instead of pursuing initiatives like AI agents for health and shopping, on concerns it was losing its AI leadership to Google’s Gemini 3. But trying to compete with Google could delay OpenAI in its trajectory toward $100 billion in annual revenue by 2027.
—Adam Clark and Janet H. Cho
Marvell Boosted by AI as Data Center Business Takes Off
AI is also boosting less prominent tech names, including Marvell Technology, which beat third-quarter expectations on the strength of its data center business and forecast stronger-than-expected growth for
the segment. CEO Matt Murphy sees data center revenue rising more than 25% next fiscal year.
- It reported third-quarter adjusted earnings of 76 cents a share on revenue of $2.08 billion. Data center revenue—which accounts for the majority of Marvell’s sales—was $1.52 billion, a 38% increase from the prior year and coming in
just above Wall Street estimates.
- Marvell said it expects fourth-quarter adjusted earnings to be 79 cents a share, plus or minus 5 cents, and that’s about even with Wall Street forecasts. Revenue for the quarter is expected to be $2.2 billion, plus or minus 5%.
- It
also said it will acquire AI start-up Celestial AI in a $3.25 billion cash and stock deal. Murphy’s data center forecast doesn’t include this pending deal. Marvell, which makes application specific integrated circuits, has struggled to convince the market it can win long-term deals amid tough competition.
What’s Next: ASICs are an integrated circuit chip customized for a specific use. Google’s Tensor Processing Units, now seen as a potential alternative to Nvidia’s chips in some cases, are an example. UBS analyst Timothy Arcuri believes tech firms want to diversify suppliers, looking to both GPU chips as well as ASICs.
—Angela Palumbo
Apple Stock Hits Record High After AI Chief Retires
Apple’s artificial intelligence problems appear to be fading, if recent market moves are
anything to go by. Shares closed at a recor
