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Good morning and welcome to this week’s final edition of FirstFT Americas. Here’s what we’ve got for you today:
US retirement savings opened up to crypto
Trump orders release of Epstein transcripts
Talks begin over $200bn railroad merger
And how AI is reshaping university education
Donald Trump is preparing to open the $9tn US retirement market to cryptocurrency investments, gold and private equity in a move that would spur a radical shift in the way Americans’ savings are managed.
What are the proposals? Trump is expected to sign an executive order as early as today that would open up 401k retirement plans to alternative investments beyond traditional stocks and bonds, according to three people who have been briefed on the president’s plans. The executive order would instruct Washington regulatory agencies to investigate the remaining hurdles needed to allow for such alternative investments to be included in professionally managed funds used by 401k savers, these people said.
Why it matters: In the US, 401k plans are among the most popular ways working Americans save for retirement, allowing them to invest a portion of their salaries in publicly traded securities tax-free. The decision to open up 401k plans to cryptocurrencies came after the House of Representatives voted by 308 to 122 to approve the so-called Genius Act, which would regulate stablecoins and pave the way for banks to launch their own digital assets. The House also passed a market structure bill known as the Clarity Act to determine whether an asset should be considered a security and a bill prohibiting the Federal Reserve from issuing central bank digital currency at the end of “crypto week” in the Capitol. Read more on what the new rules will mean for the savings industry.
Here’s what else we’re keeping tabs on today and over the weekend:
Economic data: Mexico’s national statistics agency publishes its preliminary economic growth figures for June. The University of Michigan publishes its July consumer sentiment index for the US today.
Results: 3M, American Express, Charles Schwab and lender Regions Financial are among the companies publishing second-quarter results. Netflix shares are expected to dip at the open of trade despite raising its revenue forecast for the remainder of the year in results published last night.
Elections: Voters go to the polls in Japan to elect members of the upper house, with the ruling LDP in danger of losing its majority.
Which company recently received backing from both the Pentagon and Apple? Take our news quiz to find out.
And don’t forget to send your questions for our Canada correspondent Ilya Gridneff on the direction the country is taking under new premier Mark Carney. Email firstft@ft.com and I’ll put your questions to Ilya.
Five more top stories
1. Donald Trump asked the US attorney-general to unseal grand jury transcripts relating to Jeffrey Epstein as the administration tries to contain a backlash from some corners of the president’s Maga base over the handling of files related to the late convicted paedophile. The decision to release the transcripts came after Trump said he would sue the Wall Street Journal for an article published by the news organisation related to his relationship with Epstein. Read the full story.
2. Union Pacific Railroad is in early-stage talks with rival Norfolk Southern over a nearly $200bn merger that would create a transcontinental US railroad giant, according to people familiar with the matter. Both parties have engaged advisers and begun to sketch out a plan of how a deal could take shape. Here’s more on what is being discussed.
3. A secretive technology investment group that is a top backer of Elon Musk’s companies, including SpaceX and xAI, will close to external investors after racking up such big gains that it is no longer dependent on outside financing. Vy Capital, which was co-founded in 2014 by John Hering and Alexander Tamas, has about $15bn of assets under management and has generated about 28 per cent annual returns over the past decade.
More technology news: Artificial intelligence search engine Perplexity has jumped to a valuation of $18bn two months after raising money at a $14bn price tag, as investors push for access to the hottest AI start-ups.
4. Federal Reserve chair Jay Powell has rebutted the Trump administration’s accusations that he misled Congress over a $2.5bn refurbishment of the central bank’s headquarters. In a letter to Russell Vought, director of the Office of Management and Budget, the Fed chair wrote designs had been simplified to “reduce the likelihood of further delays and cost increases”. Read the full story.
5. The $190bn manager of the University of California’s endowment and pension has divested from hedge funds. UC Investments in a meeting this week approved a plan to reallocate its 10 per cent absolute return portfolio — or its investments in hedge funds — to public equities, finalising a wind-down that began five years ago. UC Investments chief investment officer Jagdeep Singh Bachher lambasted the industry.
The Big Read
© FT montage/Getty
Universities are responding to the rise of generative artificial intelligence and the disruption it can cause, with some embracing it and others seeking to ban it entirely. But as educators struggle to find the right balance, they must factor in its near-ubiquitous use by students. Read our in-depth look at how AI is reshaping higher education.
We’re also reading . . . Chart of the day
Joblessness among recent college graduates globally has climbed above the overall unemployment rate for the first time on record. Looking at monthly US data, what stands out is that this rise is concentrated almost entirely among young American men. John Burn-Murdoch examines what’s behind the trend.
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As a new exhibition of Paz Errázuriz’s work opens in the UK, the Chilean photographer talks to Charlotte Jansen about life under the military dictatorship of General Pinochet. Errázuriz, 81, photographed some of the country’s most neglected, vulnerable and clandestine communities, including the homeless, sex workers, the elderly and the mentally ill.
‘Dormidos V’ (‘Sleeping V’) (1979), from the series ‘Los Dormidos’ (1979-80)