Stocks surged on hopes of a UKR war ceasefire and Fed rate cuts

 

·         Nifty also jumped as RBI may cut rates by 50 bps in Dec and Trump may soon withdraw the Russian oil levy and announce a trade deal with 15-20% tariffs.

As of November 26, 2025, Trump's push for a ceasefire in the Russia-Ukraine war has gained momentum following intense diplomatic efforts, including meetings in Geneva, Abu Dhabi, and upcoming talks in Moscow and Kyiv. The original 28-point proposal, revealed publicly around November 20, was widely criticized as favoring Russia—requiring Ukraine to cede Crimea and parts of Donbas (Eastern Ukraine), forgo NATO membership, cap its military at 250,000 troops, and grant full amnesty to Russian forces for alleged war crimes.

However, revisions have reduced it to about 19 points, incorporating Ukrainian and European input to emphasize sovereignty, security guarantees, and a ceasefire before territorial negotiations. Ukraine has agreed to the "core terms" or "essence" of this updated framework, with President Zelenskyy expressing readiness to advance but noting "much work" remains on disputed issues. President Trump has walked back an earlier Thanksgiving deadline (Thursday, November 27), stating the timeline is flexible—"the deadline for me is when it's over"—while projecting optimism that only "a few remaining points of disagreement" persist. But Russia has shown limited enthusiasm, calling for modifications in the latest Trump peace plan. Russia may not agree and continue strikes (e.g., deadly attacks in Kyiv civilian areas on November 25), but U.S. envoy Steve Witkoff is scheduled to meet Putin in Moscow soon to push forward.

On November 19-20, a U.S. delegation (led by Army Secretary Dan Driscoll) visits Kyiv; an initial 28-point draft is shared. Focus on "fact-finding" and ceasefire basics; Ukraine warns against "capitulation". Trump sets an informal Thanksgiving deadline; while demands an immediate ceasefire post-agreement, with retreats to agreed lines.

November 21: Deal maker Trump floated his latest Ukraine peace plan (28 points): Highlights

1. Ukraine's sovereignty affirmed.

2. Russia, Ukraine, and Europe sign a non-aggression pact.

3. Russia agrees not to invade neighbors, and NATO stops expansion (Eastward/Around Russia)

4. Russia and NATO launch a de-escalation dialogue.

5. The US gives Ukraine post-war security guarantees.

6. Ukraine's military is capped at 600000 troops.

7. Ukraine amends its constitution to renounce NATO membership.

8. No NATO troops in Ukraine, with exceptions for the UK-France peacekeepers plan.

9. The UK and EU keep fighter jets stationed in Poland.

10. Ukraine loses US guarantees if it invades Russia, and Russia faces full sanctions and deal reversal if it invades Ukraine again.

11. Ukraine was allowed to join the European Union (EU)

12. A global Ukraine Development Fund finances reconstruction and industry.

13. Sanctions on Russia were lifted gradually, and Russia re-entered the G8.

14. 100 billion dollars in frozen Russian assets fund Ukraine's rebuild, the rest are unfrozen (~$200B?)

15. A US-Russia compliance hotline is created.

16. Russia passes a law enforcing its non-aggression pledge.

17. U.S. and Russia extend the START nuclear treaty.

18. Ukraine renounces nuclear weapons.

19. IAEA takes control of the Zaporozhye plant, and power is split equally.

20. Both sides implement tolerance education and ban Nazi ideology.

21. New territorial lines set: Ukraine withdraws from remaining Donetsk and Lugansk, Russia withdraws from Kharkiv, Dnepropetrovsk, and Sumy, with a demilitarized Donetsk buffer under Russian recognition.

22. Neither side can change borders by force in the future.

23. Russia allows Ukraine to use the Dnieper River commercially.

24. A full civilian, POW, and remains exchange takes place.

25. Ukraine holds presidential elections within 100 days.

26. Full amnesty for all parties.

27. The deal becomes legally binding and monitored by a US-led Peace Council.

28. Immediate ceasefire begins once both sides sign, followed by troop withdrawals.

November 22-23- Geneva talks: U.S., Ukraine, Europeans revise to ~19 points; Rubio hails "very positive" progress.; Removes military caps, NATO ban; adds ceasefire-first clause and elections "as soon as possible."

November 25:

• Ukraine agrees to "core terms";
• Trump envoy Witkoff directed to Moscow.
• Russian strikes kill several in Kyiv.
• Zelenskyy: "Fewer points, many correct elements"; Trump: "Standard things" left to resolve.
• Ongoing parallel talks in Kyiv/Abu Dhabi;
• Zelenskyy signals Trump meeting soon.
• White House: "Understanding reached";
• Russia is reviewing but is silent on the ceasefire.

Core Elements of the Revised ~19-Point Plan

The updated framework, refined in Geneva, shifts from the original's Russia-leaning terms. It prioritizes an immediate ceasefire, security, and phased implementation monitored by a U.S.-led Peace Council (headed by Trump). Specifics remain partially classified, but confirmed changes include:

1. Ceasefire and Withdrawal: Immediate halt to fighting upon agreement; forces retreat to current front lines (no pre-set territorial concessions).

2. Security Guarantees: European-led "reassurance force" (French, British, Turkish troops; U.S. involvement) deploys post-ceasefire to deter reinvasion.

3. Territorial Issues: Deferred to future talks; basis is current lines, respecting Ukraine's sovereignty (removes explicit cessions of Crimea/Donbas).

4. Military Limits: Dropped cap on Ukraine's forces (previously 250,000); no NATO troop basing ban.

5. NATO/EU Path: Ukraine's membership aspirations preserved (original banned it outright).

6. Amnesty and Accountability: Full amnesty for war actions, but with monitoring; no prosecutions for complaints.

7. Elections and Governance: Ukraine holds elections "as soon as possible" post-deal (100-day deadline removed).

8. Reconstruction and Economy: Joint rehabilitation of war zones; potential use of frozen Russian assets (~$300B) for rebuilding.

9. Monitoring/Enforcement: Legally binding; violations trigger sanctions via the Peace Council.

10-19. Remaining/Disputed Points: Include de-Nazification references (Russian demand, toned down), trade normalization, and minor border adjustments—Zelenskyy to discuss directly with Trump.

The US peace plan for Ukraine drew from a Russian-authored document – Sources.

Trump's post-Gaza ceasefire focus on rapid resolutions for the Ukraine war, European demands for a "reassurance force" (involving troops from France, UK, Turkey, and potentially the U.S.), and warnings from U.S. Democrats and allies that the plan risks capitulation to Russia/Putin by 'Russian Asset/Sympathizer' Trump.

Trump's latest Ukraine peace plan aims for a "win-win" by offering Russia sanctions relief and reintegration, while giving Ukraine aid and guarantees. Critics note it still implicitly favors Moscow by freezing lines where Russia holds ~20% of Ukraine. Negotiations could culminate in a Zelenskyy-Trump White House meeting this week, with Witkoff-Putin talks testing Russia's buy-in. Success hinges on security force commitments and asset seizures, potentially at December's EU summit. Risks include Russian escalation (e.g., intensified strikes) or Ukrainian domestic backlash if land concessions emerge. Trump aims for a 2025 end. This balances urgency with Ukraine's red lines, but full agreement remains elusive.

Wall Street futures (stocks) in early Santa mode on hopes of an imminent Ukraine war ceasefire; oil and Gold slip briefly, but recovered soon to some extent as Russia may play hardball over rare earth materials-rich Eastern Ukraine's full control. Trump may also be planning a JV with Russia/Putin & Ukraine for these REMs.

The market is now discounting almost an 85% probability of a Fed rate cut in December after Powell's proxy, Daly, batted for another rate cut in December.

Fed's Daly: November 25-13-10

1.  I see greater risks that the low-hiring, low-firing equilibrium ultimately would break in a negative direction.

2.  I still think the Fed can bring inflation back to 2% target without a rise in unemployment.

3.  On the US labour market, I don't feel as confident that we can get ahead of it.

4.  I see a sudden deterioration in the job market as both are more likely, harder to manage than an inflation flare-up.

5.  There's a little more concern that labor demand will continue to slow

6.  Services inflation has not been declining at a steady clip.

7.  I think risks are in balance at the moment, still slightly higher on employment.

8.  There is no correct size for the balance sheet.

9.  We haven't heard a lot about net job losses from AI.

10.  I don't know how patient AI investors will be to wait the decade needed.

11.  I think AI is productivity-enhancing, but I don't know yet whether it's transformational.

12.  We still have work to do to bring inflation down to 2%.

13.  Really, I think there is a premium on waiting to decide on rates until you have as much information.

14.  It's too premature to say definitely whether there will be a cut or no cut in December.

15.  Inflation ex-tariffs is coming down, but stubbornly

16.  The labor market has slowed quite a bit

17.  We still have work to do to bring inflation down to 2%

18.  The US economy has cautious optimism

19.  Uncertainty has come down quite a bit in the US economy

20.  The Fed should be willing to change its balance sheet approach.

21.  Communication on the balance sheet is essential.

22.  I always see the broadest disagreement at inflection points.

23.  Historically, the FOMC has been more divided than it is now.

24.  I don't see evidence that monetary policy doesn't transmit to the economy.

25.  Asset valuations reflect higher productivity expectations, whether AI ends up being transformative or not.

26.  Financial conditions are one of many inputs to Fed decisions.

27.  We're definitely in a low-firing, low-hiring period.

28.  If firms were scrambling to find workers, wages would rise.

29.  Slowing wage growth shows it's a negative demand shock in the labor market.

30.  I don't want to make the mistake of holding on to rates too long.

31.  We are not going to see inflation pressure from the labor cost side.

32.  We have to take apart inflation and ask how much is tariffs.

33.  If we unpack inflation data, we don't see inflation rising in services, housing, or inflation expectations.

34.  We are looking to see if productivity gains continue.

35.  We can't take our eyes off inflation.

36.  The Fed is in a good place after a slight adjustment in policy.

37.  Policy is in a good place.

38.  Productivity and GDP are rising as the labor market is slowing.

39.  Rate cuts so far have supported the labor market and kept downward pressure on inflation.

40.  Inflation has been pretty contained in goods prices.

The San Francisco (SF) Fed President Daly, a non-voting FOMC participant in 2025 with a centrist-to-hawkish outlook, changed her outlook in a matter of a few days from hawks to doves and expressed her support for a potential December rate cut on November 25, 2025. Like the NY Fed President Williams, Daly is also known as Powell's proxy, and thus the market is now discounting almost 80-85% probability of another consecutive rate cut in December. Trump may appoint his close loyalist and a known Uber Dove, Hassett (NEC director), as the next Fed Chair.

Latest Comments by Treasury Secretary Scott Bessent on Fed Rate Cuts and Chair Selection

On November 25, 2025, Bessent's comments addressed President Trump's ongoing pressure for faster rate cuts and the search for a successor to Fed Chair Powell, whose term as chair expires in May 2026. Though Powell could remain a governor until 2028, this is mostly unlikely. Bessent, leading the chair selection process, emphasized Fed independence while downplaying tensions as "joking" and advocating for a streamlined central bank.

On Fed Rate Cuts

Bessent pushed back against perceptions of direct pressure on the Fed, framing monetary policy as "very complicated" beyond simple rate reductions. He reiterated a belief in room for easing, citing a neutral federal funds rate ~150 basis points below current levels (3.75%-4.00% post-October cut), but avoided calling for immediate action: "We've gotten to this point where monetary policy has gotten very complicated, and it's more than just cutting rates."

In response to Trump's November 19 threat (jokes) to fire him if rates don't fall faster, Bessent clarified: "If you were in the room, he was joking." He noted conditions are "slightly more favorable" for cuts than in September (when a 50 bps move occurred pre-election), potentially warranting another based on weak June-July BLS data, but stressed decisions rest with the independent FOMC.

On Fed Chair Selection

Bessent confirmed the process is advancing rapidly, with interviews concluding and a shortlist of five candidates narrowed from 11 since Labor Day. He envisions a chair who simplifies the Fed's post-crisis complexities (e.g., money market management) and reduces its outsized economic dominance: "I think that there's a very good chance that the president will announce before Christmas... But it's his prerogative."

A "key theme" of interviews: Simplifying the Fed into a "very complicated operation." Candidates include:

1.  Kevin Hassett (former CEA Chair, Trump ally, favoring lower rates).

2.  Christopher Waller (Fed Governor; recent second interview with Bessent, seen as frontrunner)

3.  Michelle Bowman (Fed Governor and Vice Chair for Supervision).

4.  Rick Rieder (BlackRock CIO for global fixed income).

Bessent has advocated for Powell to finish his term, per Trump's November 19 mimicry of his pleas ("Sir, please don't fire him"), to preserve stability. He firmly declined the role himself, as Trump confirmed: "He wants no part of it, he likes being secretary of the Treasury."

Highlights of comments by the US Treasury Secretary Bessent: November 25

1.  Capex is spreading out

2.  The bond market is having its best year since 2020

3.  Fed governors seem to be leaning toward cutting rates

4.  The 'Ample reserves regime' might be fraying

5.  It's time for the Fed to move into the background

6.  Regional Fed Presidents should talk less

7.  On the US and China: The relationship is in good place

8.  Trump may attend the Shenzhen APEC summit in November 2026

9.  Trump initiated the Xi call, 30 days after the Korea meet

10.  There could be four meetings between Trump-Xi next year

11.  On the Fed Chair: I have five strong candidates.

12.  We will have the last interview in the second round today

13.  There is a very good chance President Trump will announce the Fed chair before Christmas

14.  On China trade: The Chinese are right on schedule for soybean purchases

15.  The US position on Taiwan is unchanged

16.  We agreed to work together for peace amid war in Ukraine

17.  On US, China: We're always going to be natural rivals/competitors, but the relationship is in a good place

Trump Reportedly Favors Kevin Hassett as Next Fed Chair-Reports

President Trump is increasingly leaning toward nominating Kevin Hassett, his White House National Economic Council (NEC) Director and a longtime economic advisor, as the next Federal Reserve Chair to succeed Jerome Powell, whose term expires in May 2026. According to multiple reports citing sources close to the process, Hassett has emerged as the frontrunner among a shortlist of five candidates, bolstered by his alignment with Trump's push for more aggressive interest rate cuts and his crypto-friendly views. An announcement could come before Christmas, per Treasury Secretary Scott Bessent, though the White House has dismissed speculation as premature.

Background of Trump loyalist and 24/7 smiling face (like a joker) Hassett: A known policy dove and Crypto Friendly

Hassett, 63, served as Chairman of the Council of Economic Advisers (CEA) during Trump's first term (2017-2019), where he championed tax cuts, deregulation, and trade policies. He rejoined the administration in 2025 as NEC Director, advising on economic strategy amid post-election priorities like tariffs and growth stimulus. Hassett is also a visiting fellow at the Hoover Institution, a CNN contributor, and holds Coinbase stock, tying him to crypto advocacy—he advised on blockchain policy and has praised digital assets as innovation drivers.

Hassett's Rate Views:

In a November 20 Fox Business interview, Hassett stated he'd "immediately reduce rates" if chair, citing data showing labor softening (unemployment at 4.3%) and inflation (~2.75% PCE) not warranting restraint. This dovish stance contrasts with Powell's "higher for longer" caution and aligns with Trump's November 19 rant calling Powell "grossly incompetent" for slow cuts.

White House Response: Spokesman Kush Desai called discussions "speculation" until Trump announces, noting the president's penchant for surprises. No formal endorsement yet, but internal momentum favors Hassett.

However, Senate confirmation (requiring 51 votes) remains uncertain; Democrats may oppose a perceived Trump loyalist amid ongoing litigation over Trump's bid to oust Governor Lisa Cook and insulting comments for Fed Chair Powell. If confirmed, Hassett could serve until 2030 (post-governor term), reshaping the Fed's dual mandate amid tariffs and AI uncertainties. This development underscores Trump's bid to reclaim influence over monetary policy, echoing first-term tensions.

Implications for Markets and Policy:

Fed credibility & independence may be at stake if 'joker' Hassett is indeed selected to be the next Fed Chair (instead of Waller). Hassett will always be seen as Trump's proxy. Fed is now leaning towards another consecutive rate cut in Dec'25 (in line with Sep'25 dot-plots) after the publication of September'25 delayed job report, showing an uptick in headline unemployment rate.

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