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Frank Kelly: Special Washington Update | May 30, 2025

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5/30/2025

Is the Trump Administration getting close to announcing the launch of a sovereign wealth fund?

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Francis (Frank) J. Kelly

Founder & Managing Partner, Fulcrum Macro Advisors LLC and Senior Political Strategist for DWS

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  • Three crucial questions
  • Bottom line
  • SWF is a part of a broader shift that defines Trump’s second-term agenda

Earlier this year, Trump directed the and to deliver a report on the feasibility of establishing a U.S. . However, Trump has shifted his focus on reducing the national debt and has taken a step back from this idea. Still, Softbank CEO Masayoshi Son recently proposed a joint U.S.-Japan SWF, reigniting speculation over the prospects of this fund.  

Three crucial questions
A former Treasury official with extensive experience in SWFs presents three crucial questions: “Where would the money come from? What would it be used for? How would it be structured?”

Among recent market speculation and recurring proposals is a plan to use and to finance a SWF, which Congress would need to approve.  
 
Bottom Line
Creating a SWF would require complex accounting, which could raise concerns in a bond market that has already become skeptical of Trump’s fiscal priorities. That might be the reason Trump has been backtracking on the creation of a U.S. SWF.

However, elements of this proposal are in development, as dimensions, receipt features, and “” schemes continue to circulate within the Trump Administration as potential ways to portray new or enhanced government assets.  

A broader shift that defines Trump’s second-term agenda
Ultimately, the SWF is a part of a broader shift that defines Trump’s second-term agenda. The three decades following the end of the Cold War, corporate investment and business decisions were guided almost exclusively by profitability. Today, Trump’s tariff policy aims to alter the decisions factoring into corporate America’s supply chains. Apple, in particular, has faced threats of steep tariffs unless iPhone production relocates to the US. Meanwhile, through Nippon Steel’s acquisition of U.S. Steel, the government is set to receive a “golden share” in the new entity. This marks a transformation of politics, not just profit, becoming a central driver in private investment strategies and capital flows overall. 

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Francis (Frank) J. Kelly

Frank is the Founder and Managing Partner of Fulcrum Macro Advisors LLC, a political risk advisory firm based in Washington, DC. He is the senior political strategist for DWS.

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