WSJ What’s News - Why the San Francisco Fed President Supports a Rate Cut in December

Episode Date: November 24, 2025

P.M. Edition for Nov. 24. In an exclusive interview, San Francisco Fed President Mary Daly says she supports a rate cut at the Fed’s next meeting in December. She has rarely been in public opposition with Fed Chair Jerome Powell. Plus, WSJ national security correspondent Michael Gordon discusses the sticking points in negotiations over President Trump’s Ukraine peace plan. And, in an unusual diplomatic move, Chinese leader Xi Jinping called President Trump to discuss Taiwan. Alex Ossola hosts. Correction: A new report said the share of movies that included tobacco products last year was 10 percentage points higher than in 2023. An earlier version of this podcast incorrectly said it was 10 percent higher. (Corrected on November 25) Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Plus, what's next for Trump's Ukraine peace plan? This is fundamentally about sovereignty, Ukraine's sovereignty and Ukraine's security. And yes, this plan would require Ukraine to relinquish some of the Donbos that they still hold a portion of. And they've objected to that. And why employees at big private equity firms are jumping ship, leaving behind paydays that could be worth millions. It's Monday, November 24th. I'm Alex O'Sullough for the Wall Street Journal.

This is the PM edition of What's News, the top headlines and business stories that move the world today. In an exclusive interview with the Wall Street Journal, San Francisco Fed President Mary Daley said today that she supports lowering interest rates at the central bank's meeting next month. Daly doesn't have a vote on monetary policy this year, but her views are notable, as she rarely has been in public opposition with Fed Chair Jerome Powell. Powell is likely to play the key role resolving officials' differences on whether to cut rates in December.

Daly says she would cut rates because a worsening jobs market is more of a risk right now than a big increase in inflation. Growing hopes for a rate cut next month are helping revive stocks. Market bets on a December rate reduction rose to 80%, up from about 40%. 40% a week ago. Chip stocks and other big technology shares jumped today, and the NASDAQ rose 2.7% leading gains. The S&P rose 1.6% and the Dow added 0.4%. As we mentioned on this morning show, the White House says it has made progress towards ending the war in Ukraine after this weekend's talks in Geneva. European diplomats say that negotiators found some common ground on the plan. But European officials familiar with the matter say the biggest issues will be left to President Trump and Ukrainian President Volodymyr Zelensky to work out. Here to walk us through where the negotiations stand is WSJ National Security correspondent Michael Gordon. Michael, Zelensky's main problem with the plan is the Kremlin's demand for Ukraine's territory

in the east of the country, including territory it hasn't captured. He says that would leave Ukraine vulnerable to future attack by Russia. How much of a sticking point is this? The Trump administration has a tendency to cast this in terms of territory, but that's not what This is fundamentally about sovereignty, Ukraine's sovereignty and Ukraine's security. And yes, this plan would require Ukraine to relinquish some of the Donbos that they still hold a portion of. And they've objected to that. But what does Ukraine want? They want European peacekeepers on Ukrainian soil as a deterrent in case the Russians would attack again in the future.

That's one thing they want. The other thing is they don't want. any constraints on the size of their military. This plan that the Trump people put together with Russian input bars European reassurance forces, it's called, from being deployed in Ukraine, and it also caps the Ukrainian military. It's 600,000. So let's say the U.S., Ukraine, and Europe are able to reach an agreement. What are the prospects of Russia then agreeing? Right now, the Russians don't appear to be in much of a negotiating frame of mind. They're taking enormous casualties, but they're willing to pay that price to grind forward and claim more ground. So what are the prospects of Vladimir Putin changing his strategic objectives? I would say not great. And

herefore, there's also been a pension by the White House to put more pressure on the Ukrainian side than the Russian side. That was WSJ National Security correspondent, Michael Gorman. Thank you, Michael. Thank you. Thank you. In four Trump administration-related developments today, China's leader Xi Jinping initiated a phone call with President Trump to talk about Taiwan, in a rare diplomatic outreach from China that follows growing tensions with Japan. Japan's new prime minister has said the country would likely get sucked into a war if China tried to take Taiwan by force.

In a social media post today, Trump said he accepted Xi's invitation to visit Beijing in April and that she would visit the U.S. later next year. He didn't mention Taiwan or the diplomatic crisis between Beijing and Tokyo, an omission that's likely to rattle U.S. allies in the region. Trump said he and she discussed the war in Ukraine, among other things. A federal judge has dismissed criminal charges against both former FBI director James Comey and New York Attorney General Letitia James, in a blow to President Trump's efforts to prosecute his perceived political adversaries.

The judge ruled that Lindsey Halligan, the prosecutor Trump, chose to bring the cases, was unlawfully appointed. White House Press Secretary Caroline Levitt says the Justice Department plans to appeal. President Trump's advisors are discussing a proposal to head off sharp increases in health insurance costs for millions of Americans next year. People familiar with the strategy say the White House officials are weighing a two-year extension of enhanced Affordable Care Act subsidy. lawmakers are facing a mid-December deadline for health care votes promised by the GOP to Democrats as a condition for ending the government shutdown earlier this month. The subsidies expire at the end of the year. White House officials cautioned that Trump hadn't settled on a plan.

And the Pentagon says it's probing allegations of misconduct against Democratic Senator Mark Kelly of Arizona after he appeared in a video with other Democrats calling on troops to disobey unlawful orders. Kelly, a retired Navy captain, says efforts to intimidate him won't stop him from doing his job. Coming up, why employees at private equity firms are leaving for smaller rivals. That's after the break. At Desjardin, we speak business. We speak startup funding and comprehensive game plans. We've mastered made-to-measure growth and expansion advice, and we can talk your ear off.

about transferring your business when the time comes. Because at Desjardin business, we speak the same language you do, business. So join the more than 400,000 Canadian entrepreneurs who already count on us, and contact Desjardin today. We'd love to talk, business. A job at a big private equity firm, such as Blackstone, KKR, or TPG, was once a ticket to lifelong riches. And the bigger the firm, the bigger the payday.

Now, as the industry struggles to unload companies, many employees are headed for the exits. For jobs at smaller firms where they're betting, they'll be able to earn more. Miriam Gottfried, who covers private equity for the journal, is here to explain why some employees are taking their chances elsewhere. Miriam, what's going on that's making these big firms less desirable for employees? Well, there are two separate things, I would say. One is sort of a secular shift. The biggest firms have become massive institutions that have kind of, of changed from what they originally were. They originally were these sort of nimble deal shops

and now they're almost becoming bank-like. But then a more cyclical thing is also happening. And that's that firms that are pretty established bought a bunch of companies that they can't really sell profitably right now, which means they're not exiting their deals. They're not selling them off. And that means that employees, they're not receiving the typical carried interest compensation that they might be, and this is performance-based compensation for their deals. Basically, the 20% of profits that go to the manager of a private equity fund. The longer you wait for it, the less faith you have that you're actually going to get it. Why is this more advantageous for the employees at smaller firms? Well, smaller firms tend to be more focused. They

might have just one fund instead of many different funds. These smaller funds also tend to have higher returns. And many of the smaller funds that we write about in the story are actually startups. That means they have none of these portfolio companies that they can't sell. They're starting from scratch. Shifting to the big private equity firms, I mean, just how dire is this exodus for them? What does it mean for their future if a bunch of mid-level people are leaving? I don't think it's dire because there are always people who are staying. These firms are big. But one thing that these firms have to think about in the long run, is culturally, are we able to attract the type of A-plus-plus investors that we once were able to?

If the best investors don't want to work for us anymore, what does that mean for the quality of the product we're able to deliver? That was WSJ reporter, Miriam Gottfried. Thanks, Miriam. My pleasure. Coles has named Michael Bender as its new CEO. He's been the retailer's interim CEO since May, after its then-chief, Ashley Buchanan was fired for violating the company's ethics code. Bender is largely continuing a strategy to try to reverse the company's sales lump. And shares of Novo Nordisk slid in European trading after the Danish drugmaker said a pill with the key ingredient in Ozempic and Wagovi

didn't slow Alzheimer's disease in two late-stage clinical trials. It's the latest setback in a tough year for the company, whose lead in the obesity drug market was overtaken by rival Eli Lilly. Novo Nordisk has been through a leadership shake-up and layoffs, and recently lost a bidding war for obesity drug startup met Sarah. Is smoking cool again? U.S. smoking rates are at their lowest level in decades, but celebrities are lighting up, and that's making anti-smoking advocates worry. A new report says that cigarettes, cigars, and other tobacco products appeared in about half of movies that came out last year, up 10 percentage points from 2023.

They're coming up in songs, too, like TikTok star Addison Ray's single headphones on earlier this year, where the chorus includes the line, quote, need a cigarette to make me feel better. And in Lords, what was that? Where she says, quote, this is the best cigarette of my life. The Centers for Disease Control and Prevention has said that smoking in movies helps push young people into taking up smoking. And cigarettes appeal today, some young smokers say, it just looks cool. Heads up, we've made a correction to this episode.

A new report said that the share of movies that included tobacco products last year was 10 percentage points higher than in 2023. An earlier version of this podcast incorrectly said it was 10% higher. And that's what's news for this Monday afternoon. Today's show was produced by Pierre Bienname, with supervising producer Tali Arbell. I'm Alex Oceleste for the Wall Street Journal. We'll be back with the new show tomorrow morning. Thanks for listening.

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