Hello there.
Welcome to the week! Quick question: If the Fed directly invests in a company, are they automatically too big to fail?
🏦 The Fed's New Boss Had a Rough Day
⚡️ It’s a Good Year to Be an Oil Baron
🏭 Your Tax Dollars Are Buying Chunks of Tech Companies
₿ Even Goldman’s On Board to Get Some Clarity
🏛 Political Portfolio Spotlight: Rep. Jared Moskowitz (D-FL)
Wait, with quantitative easing, is the whole thing too big to fail? Hold up; better not get existential. We’ve got a whole week ahead of us. Let’s dive in. 👇
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🏦 Tough Day at the Office for Kevin
You know that feeling when your teacher called on you, and you totally blanked? That was basically Fed Chair Kevin Warsh on Wednesday. The Federal Reserve voted to keep interest rates exactly where they are (snooze), but the real drama was what happened after.
Warsh held a press conference where he was supposed to explain why the Fed isn't raising rates even though prices are still too high. Instead, he kind of... didn't? He dodged questions about what would actually make him want to raise rates, and said the Fed might even change how it measures inflation after some review next year. The bond market was NOT impressed. The 30-year Treasury yield shot up to levels we haven't seen since 2007.
But the awkward thing is that before Warsh got this job, he spent a lot of time criticizing his predecessor Jerome Powell for not being clear enough. Now he's doing the same thing, except arguably even worse? Three members of the Fed actually voted against him, wanting to raise rates right now. That's a lot of disagreement for something that's supposed to be a team decision.
Basically, uncertainty is back. If you've been waiting for the Fed to clearly signal when rate cuts are coming, you might be waiting a while. And if inflation stays stubborn, the Fed could be forced into aggressive moves later that catch everyone off guard.
⚡️ The Policy Pulse
Major oil companies posted massive profits as US-Iran fighting drove energy prices higher, with Exxon nearly doubling profits to $14.53 billion.
Congress passed a historic housing bill to boost home supply, but federal agencies face serious implementation challenges after DOGE cuts.
The US economy slowed to 1.5% growth in the second quarter while core inflation held at 3.3%, complicating the Fed's policy path.
Coal demand is surging as US power plants enter bidding wars to meet rising electricity needs driven by AI data centers.
The Consumer Financial Protection Bureau is ramping up supervision of small lenders after Acting Director Vought's shutdown attempts were blocked in court.
🏭 “State Capitalism? In My America?”
Pop quiz: how many companies does the US government own a piece of right now? If you guessed zero because that sounds like something only authoritarian countries do… well, your logic makes sense, at least. The correct answer is 30, and the Commerce Department just added six more semiconductor companies to Uncle Sam's stock portfolio this week.
The government is handing out $874 million from the CHIPS Act (that big law from 2022 meant to bring chipmaking back to America) to companies working on AI computing and semiconductor tech. But instead of just giving them grants like a normal government program, they're taking "minority, non-controlling equity stakes" in exchange. Yes, that is just another way of saying, "we're buying stock in your company."
The craziest part is that this is totally normal now. When Biden signed the CHIPS Act, he gave out grants without taking equity. Trump's team decided to flip that and started building what basically looks like a government-run venture capital fund. The portfolio already includes Intel (where the government's 10% stake has supposedly made $70 billion in unrealized gains), rare earth mining companies, quantum computing startups, nuclear energy, and now a bunch of AI chip companies. All told, the feds have dropped about $27 billion into these deals.
Is this good or bad? Honestly, nobody really knows yet. The government says it's about national security and making sure America doesn't fall behind China in crucial tech. Buuuuuut there's no public list of all these investments, no clear plan for how the government will manage them, and definitely no playbook for what happens if one of these companies tanks.
Almost half of Americans in a recent poll said they think the government taking stakes in companies is a bad idea. But it's happening anyway, and if you're investing in semiconductors or AI, you're now sharing the market with the US Treasury Department. Wild times!
₿ The Coin Toss
Goldman Sachs CEO David Solomon backed the crypto Clarity Act, saying it creates a level playing field despite confusion over rules for the President.
The US sanctioned Iranian companies accused of accepting Bitcoin payments from ships passing through the Strait of Hormuz to bypass sanctions.
Lawmakers are pushing to eliminate a sales tax loophole for crypto investors, a rare bipartisan agreement estimated to raise $24 billion over a decade.
A Coldcard wallet flaw drained $38 million worth of Bitcoin from around 500 wallets in under 30 minutes after a firmware bug made keys predictable.
Bitcoin's $60,000 put option is now the most popular bet on Deribit as traders hedge against further declines heading into historically negative August.
🤡 Meme of the Day
🏛 Political Portfolio Spotlight
Elected officials have had a tremendous amount of success in the market recently.
Trading data provided by our partners at AltIndex.
We want to keep you updated on what they’re trading and when so you can leverage that intel as you plan out your own portfolio.
Remember to always DYOR.
Rep. Jared Moskowitz (D-FL)
💲 Top Trades This Week:
[SELL] S&P Global (SPGI)
🔍 Analysis:
Moskowitz's latest filing was heavily concentrated in purchases, with multiple buys spread across technology, healthcare, consumer brands, and housing-related companies.
Microsoft led the group, reflecting continued strength in large-cap technology, while Monster and HCA added exposure to consumer spending and healthcare services.
The key takeaway is that this filing remained broadly growth-oriented, with most capital flowing into established companies rather than defensive assets or cash.
Rep. Jared Moskowitz (D-FL)
That’s all for today. Write us and let us know your thoughts on the market, the newsletter, or the weather—we’d just love to hear from you.
Till next time,
— Brandon and Blake with Invested Inc.
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