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Elon Musk in line for $1 trillion pay package if Tesla hits aggressive goals over next 10 years

Summary

  • proposes nearly $1 trillion pay package for
  • Plan spans 10 years with 12 share tranches tied to milestones
  • Targets include $2 trillion market cap and 20M vehicle output
  • Musk’s compensation linked to production and delivery goals
  • Tesla also expanding into and innovation

Tesla CEO Elon Musk could be in line for a payout of $1 trillion if his electric car company meets a series of extremely aggressive targets over the next 10 years, according to documents released by the company.

Tesla, which is leaning heavily into robotics and AI, said in a regulatory filing on Friday that the package has a dozen share tranches that include awards for Musk if targets, ranging from car production to the total value of the company, are met over that time period.

Very early in the plan, Tesla would have to reach a market valuation of $2 trillion and achieve 20 million vehicles deliveries. Tesla delivered less than 2 million vehicles in 2024.

That milestone would also required a million robotaxis in commercial operation and the delivery of 1 million artificial intelligence bots.

Musk needs to remain with Tesla for at least seven and a half years to cash out on any stock, and 10 years to earn the full amount.

Musk has been one of the richest  in the world for several years.

Musk would also receive more voting power over Tesla under the proposed plan. The EV company is set to hold its annual meeting on Nov. 6. Tesla’s last shareholders meeting was on June 13 of last year, where investors voted to restore Musk’s record $44.9 billion pay package that was thrown out by a Delaware judge earlier that year.

A condition of the 11th and 12th tranches of the plan includes Musk coming up with a framework for someone to succeed him as CEO.

The goals set out for Musk and Tesla are extremely ambitious given recent tumult at the Texas company.

Tesla shares have plunged 25% this year largely due to blowback over Musk’s affiliation with President Donald . But Tesla also faces intensifying competition from the big Detroit automakers and particularly from China.

Telsa sales have fallen precipitously in Europe after Musk aligned with a far-right political party in German.

Sales plunged 40% in July in the 27 European Union countries compared with the year earlier even as sales overall of electric vehicle soared, according to the European Automobile Manufacturers’ Association. Meanwhile sales of Chinese rival BYD continued to climb fast, grabbing 1.1% market share of all car sales in the month versus Tesla’s 0.7%.

In its most recent quarter, Tesla reported that quarterly profits plunged from $1.39 billion to $409 million. Revenue also fell and the company fell short of even the lowered expectations on .

Investors have grown increasingly worried about the trajectory of the company after Musk had spent so much time in Washington this year, becoming one of the most prominent officials in the in its bid to slash the size of the U.S. government.

Last month Tesla said that it gave Musk a stock grant of $29 billion as a reward for years of “transformative and unprecedented” growth despite a recent foray into right-wing politics that has hurt its sales, profits and its stock price.

The award arrived eight months after a judge revoked Musk’s 2018 pay package for a second time, something the company noted in August. Tesla has appealed the ruling.

Tesla said at the time that the grant was a “first step, good faith” way of retaining Musk and keeping him focused, citing his of SpaceX, xAI and other companies. Musk said recently that he needed more shares and control so he couldn’t be ousted by shareholder activists.

Tesla’s stock rose nearly 2% in premarket trading.

Tesla CEO Elon Musk could be in line for a payout of $1 trillion if his electric car company meets a series of extremely aggressive targets over the next 10 years, according to documents released by the company.

Tesla, which is leaning heavily into robotics and AI, said in a regulatory filing on Friday that the package has a dozen share tranches that include awards for Musk if targets, ranging from car production to the total value of the company, are met over that time period.

Very early in the plan, Tesla would have to reach a market valuation of $2 trillion and achieve 20 million vehicles deliveries. Tesla delivered less than 2 million vehicles in 2024.

That milestone would also required a million robotaxis in commercial operation and the delivery of 1 million artificial intelligence bots.

Musk needs to remain with Tesla for at least seven and a half years to cash out on any stock, and 10 years to earn the full amount.

Musk has been one of the richest people in the world for several years.

Musk would also receive more voting power over Tesla under the proposed plan. The EV company is set to hold its annual shareholders meeting on Nov. 6. Tesla’s last shareholders meeting was on June 13 of last year, where investors voted to restore Musk’s record $44.9 billion pay package that was thrown out by a Delaware judge earlier that year.

A condition of the 11th and 12th tranches of the plan includes Musk coming up with a framework for someone to succeed him as CEO.

The goals set out for Musk and Tesla are extremely ambitious given recent tumult at the Texas company.

Tesla shares have plunged 25% this year largely due to blowback over Musk’s affiliation with President Donald Trump. But Tesla also faces intensifying competition from the big Detroit automakers and particularly from China.

Telsa sales have fallen precipitously in Europe after Musk aligned with a far-right political party in German.

Sales plunged 40% in July in the 27 European Union countries compared with the year earlier even as sales overall of electric vehicle soared, according to the European Automobile Manufacturers’ Association. Meanwhile sales of Chinese rival BYD continued to climb fast, grabbing 1.1% market share of all car sales in the month versus Tesla’s 0.7%.

In its most recent quarter, Tesla reported that quarterly profits plunged from $1.39 billion to $409 million. Revenue also fell and the company fell short of even the lowered expectations on Wall Street.

Investors have grown increasingly worried about the trajectory of the company after Musk had spent so much time in Washington this year, becoming one of the most prominent officials in the Trump administration in its bid to slash the size of the U.S. government.

Last month Tesla said that it gave Musk a stock grant of $29 billion as a reward for years of “transformative and unprecedented” growth despite a recent foray into right-wing politics that has hurt its sales, profits and its stock price.

The award arrived eight months after a judge revoked Musk’s 2018 pay package for a second time, something the company noted in August. Tesla has appealed the ruling.

Tesla said at the time that the grant was a “first step, good faith” way of retaining Musk and keeping him focused, citing his leadership of SpaceX, xAI and other companies. Musk said recently that he needed more shares and control so he couldn’t be ousted by shareholder activists.

Tesla’s stock rose nearly 2% in premarket trading.

Justice Department probes mortgage fraud claims against Lisa Cook of Federal Reserve, AP source says

Summary

WASHINGTON (AP) — The Justice Department has begun examining mortgage fraud allegations against Lisa Cook, the Federal Reserve governor who is challenging a effort to remove her from her job in a move she says is designed to erode the central bank’s independence.

Investigators have issued subpoenas as part of an inquiry into Cook that was spawned by a criminal referral from the country’s top housing regulator, according to a person familiar with the matter who was not authorized to discuss the probe and spoke on condition of anonymity to The Associated Press.

A Justice Department spokesperson declined to comment on the inquiry, which was earlier reported by The Wall Street Journal.

“Predictably and recognizing the flaws in challenging their illegal firing of Governor Cook, the administration is scrambling to invent new justifications for its overreach. This Justice Department — perhaps the most politicized in American history — will do whatever President Trump demands,” Cook’s lawyer, Abbe David Lowell, said in a statement.

News of the investigation comes amid a high-stakes fight over President Donald Trump’s announcement last month that he was ousting Cook, an action she says is being undertaken so that he can seize control over a central bank typically shielded from political pressure and tasked with making decisions about whether to raise or lower interest rates.

Trump moved to fire Cook on Aug. 25 after one of his appointees alleged that she committed mortgage fraud related to two properties she purchased in 2021, before she joined the Fed.

Bill Pulte, who made the criminal referral in his capacity as director of the Federal Housing Finance Agency, has asserted that Cook, had claimed two primary residences, in Ann Arbor, Michigan, and Atlanta, in 2021 to get better mortgage terms. Mortgage rates are often higher on second homes or those purchased to rent.

The Justice Department inquiry is centered on those two properties, according to the person familiar with the matter, and is being coordinated with U.S. Attorney offices by Ed Martin, the director of the Justice Department’s Weaponization Working Group, who is also pursuing mortgage fraud investigations into perceived Trump adversaries, including Sen. Adam Schiff of California and New York Attorney General Letitia James, both Democrats. Both have vigorously denied any wrongdoing.

Cook’s lawyers have also insisted that she did not engage in fraud.

“The questions over how Governor Cook described her properties from time to time, which we have started to address in the pending case and will continue to do so, are not fraud, but it takes nothing for this DOJ to undertake a new politicized investigation, and they appear to have just done it again,” Lowell said.

Separately, on Thursday, the Justice Department urged a federal judge in Washington to allow for Cook’s immediate removal while she fights to keep her job, dismissing as “baseless” Cook’s claim that the president is attempting to fire her so that he can seize control of the Federal Reserve.

Cook’s lawyers have argued that the firing was unlawful because presidents can only fire Fed governors “for cause,” which has typically meant inefficiency, neglect of duty, or malfeasance while in office. They also said she was entitled to a hearing and a chance to respond to the charges before being fired, but was not provided either. Attorneys said in the court filing that Cook never committed mortgage fraud.

The Justice Department says the president has the discretion to fire Cook for cause and that his decisions cannot be reviewed by the courts.

The case could become a turning point for the nearly 112-year-old Federal Reserve, which was designed by Congress to be insulated from day-to-day political influence. Economists prefer independent central banks because they can do unpopular things, such as lifting interest rates to combat inflation more easily than elected officials.

Trump has repeatedly attacked Fed Chair Jerome Powell and the other members of the Fed’s interest-rate setting committee for not cutting the short-term interest rate they control more quickly.

Many economists worry that if the Fed falls under the control of the , it will keep its key interest rate lower than justified by economic fundamentals to satisfy Trump’s demands for cheaper borrowing.

Trump Fed pick Stephen Miran plans to keep White House job

Summary

  • nominated by for Board
  • Told Senate he’d remain a economic adviser
  • Plans “unpaid leave of absence” while serving at the Fed
  • Says he’d resign only if confirmed for a longer Fed term
  • Democrats criticize potential conflict of interest

WASHINGTON (AP) — Stephen Miran, President Donald Trump’s pick to join the Federal Reserve Board, said Thursday that he would remain a White House employee even if the Senate confirms him to fill an unexpired term at the central bank.

Miran, who was nominated to fill a gubernatorial term set to expire in January, made the disclosure at a hearing before the Senate Banking, Housing and Urban Affairs Committee.

He said that on the advice of his lawyers he would take an “unpaid leave of absence” as chair of the White House Council of Economic Advisers. Miran later said he would only resign from the Republican administration if he were nominated for a longer term at the Fed.

His answer instantly triggered alarm bells about the Fed’s independence, suggesting that the central bank could ultimately become subservient to Trump’s whims instead of its congressional mandates to keep prices stable and maximize employment. Political control of the Fed could erode the faith that the American population and investors worldwide place in the U.S. economy, which could threaten global markets and national prosperity.

Democrats blasted Miran’s plan to keep his day job at the White House.

“Your independence has already been seriously compromised,” Sen. Jack Reed, D-R.I., said. “You are going to be technically an employee of the president of the United States but an independent member of the board of the Federal Reserve. That’s ridiculous.”

Miran’s hearing reflected the broader battle over Trump’s efforts to gain control of the Fed. Because of the possible negative impacts on the economy, the Fed has tried to act based on the economic data rather than electoral considerations.

Trump, however, has engaged in a prolonged campaign of pressuring and mocking Fed Chair Jerome Powell for not cutting the benchmark interest rate to Trump’s liking, a move that could end up pumping more money into the economy and creating greater inflationary risks. The Fed has yet to reach its 2% inflation target and has held its rates steady in part because of the uncertainties created by Trump’s import taxes.

The president has also sought to apply pressure on the Fed over its renovation of its headquarters and other buildings and has tried to fire as a Fed governor over allegations that she committed . Cook has said she will not resign and has sued to overturn Trump’s move, but on Thursday the Justice Department had started examining the allegations against her.

Miran, in his answers to senators, played down the controversy over Trump’s desire to control the Fed. Miran said that if he were confirmed to fill the rest of Adriana Kugler’s term, he would act based on his own judgments about inflation and employment.

“Look, the president nominated me because I have policy views, that, I suppose that he liked,” he said told the committee chairman, Sen. Tim Scott, R-S.C. “If I’m confirmed to this role, I will act independently, as the Federal Reserve always does, based on my own personal analysis of economic data.”

Even Republicans saw the risks to the loss of Fed independence. Sen. John Kennedy, R-La., asked Miran to commit to “ignore all the rhetoric from all politicians” and make his own choices.

But Miran arrives with the baggage of having worked for a president who has expressed disdain for the Fed’s tradition of independence. Trump has argued that he knows more about monetary policy as he has called for the Fed’s benchmark rate to be cut by a full 3 percentage points.

In June, a Fed forecast of future rates showed emerging divisions among the policymakers. Seven projected no rate cuts at all this year, two indicated one cut and 10 forecast at least two reductions.

“This is a crisis moment for the Federal Reserve, for the financial system and for the economic stability of families all across this country,” Sen. Elizabeth Warren, D-Mass., told reporters before the start of the hearing.

Warren added that the Fed board’s “independence and their efforts to make decisions based on what’s really happening in the economy — not what the politics are — is something that benefits every single American. Donald Trump wants to burn that to the ground.”

Under questioning by Warren, Miran declined to say whether Trump lost the 2020 presidential election to Democrat Joe Biden, saying only that Congress certified Biden as president. Miran declined under questioning to contradict Trump’s unfounded claim that the Bureau of Labor Statistics had faked jobs numbers for political reasons.

Trump fired the bureau’s head after severe revisions to the July employment report showed the economy was potentially weaker than Trump’s claims of a “golden age.”

There are also questions about how Miran interprets the Fed’s independence. He said that the president is entitled to express his opinion on monetary policy and that consideration of climate change as an economic force by Fed officials would be a politicization of the central bank.

In a 2024 paper he co-wrote for the Manhattan Institute, Miran argued that the Fed was already politicized by “highly political, personnel who move freely between the White House” and the central bank’s headquarters.

In that same paper, Miran wanted to heighten presidential control, saying that having Fed board members serve at the will of the president would confer “greater democratic legitimacy” on the Fed.

By indicating that he could return to the White House, Miran seemed to undermine one of his own recommendations in his paper.

“To further insulate board members from the day-to-day political process, they should be prohibited from serving in the executive branch for four years following the end of their term,” the paper said.

Retired Coast Guard captain is new Christopher Newport biz school dean

Anna W. Hickey, a retired U.S. captain, will become of ‘s .

The -based university announced Hickey’s appointment Wednesday, saying her selection followed a national search. She succeeds Alan Witt, the former PBMares CEO who served as the business school’s dean from 2021 until his retirement in July.

Hickey retired from the Coast Guard this year after a career that dates back to 1997. She was most recently vice provost for academic administration at the U.S. Coast Guard Academy, where she also served as dean of the academy’s School of and Management.

“Dr. Hickey has a long and distinguished career of service to our country through military and leadership positions,” President William G. Kelly said in a statement. “She will be an exceptional addition to our Christopher Newport campus and an exceptional leader, teacher and scholar.”

Hickey has previously taught extensively about accounting and budgeting, with specific interests in governmental financial reporting and accounting education. She is affiliated with the Association of Government Accountants and has served as a reviewer for the Journal of Accounting Education. She has a bachelor’s degree in management from the U.S. Coast Guard Academy, an MBA in finance from Florida Atlantic University and a doctorate in accounting from West Virginia University.

“I am deeply honored to serve as the dean of the Luter School and eager to meet its outstanding students, faculty and staff,” Hickey said in a statement.

CNU established the business school in 2008 in honor of former Smithfield Foods Chairman and CEO Joseph W. Luter III, whose company had helped finance the school through a $5 million gift. Luter passed away last week at the age of 86.

The Luter School of Business currently has 323 juniors and seniors enrolled. The school is accredited by the Association to Advance Collegiate Schools of Business and offers a curriculum in business administration with concentrations in accounting, finance, management and marketing.

Virginia nursing homes sue state over Youngkin budget veto

SUMMARY:

  • 181 Virginia are suing the state over funding
  • Lawmakers approved a methodology change that would have provided additional $21.65 million in Medicaid funding for nursing facilities
  • The suit argues that Gov. Glenn Youngkin’s veto is unconstitutional and Department of Medical Assistance Services has not applied rate methodology change

More than 180 Virginia nursing homes are suing the state after Gov. Glenn Youngkin vetoed a budget provision that would have increased Medicaid funding for their facilities. The homes argue the governor’s move is unconstitutional and has left them short on money needed to hire staff and care for residents.

The (VHCA-VCAL) says its 181 members have filed before the Supreme Court of Virginia against the (). The industry association claims DMAS is refusing to apply a rate methodology change lawmakers approved earlier this year.

“We had hoped it would not come to this, but VHCA-VCAL members have an obligation to exhaust every opportunity, including action, to ensure the care Virginia’s nursing home residents rely on for 24/7 support is funded appropriately,” VHCA-VCAL President Keith Hare said in a statement. “This legal action is really about patient care for some of our most vulnerable fellow citizens. It is imperative that nursing homes have the resources they need to appropriately staff facilities and provide their residents with the high-quality care they deserve.”

Earlier this year, the General Assembly approved a state budget that directed DMAS to raise Medicaid reimbursement rates for nursing homes, a move that would have resulted in an extra $21.65 million in federal and state funding being distributed to the state’s nursing facilities.

VHCA-VCAL stated that too many nursing homes are currently facing a funding gap between the cost of care and what Medicaid pays, because the Medicaid base rate remains too low. The association said it “successfully advocated” for a rate methodology change during the 2025 General Assembly session.

On May 2, Gov. Glenn Youngkin vetoed the provision (after previously recommending its removal), saying the two-year budget already included $40 million each year for nursing homes that met or exceeded performance thresholds.

“The amendment added this year by the General Assembly would add nearly $22 million in additional annual costs,” Youngkin wrote. “Given my fiduciary responsibility to Virginia’s taxpayers, it would not be fiscally prudent for me to expand ongoing programmatic expenditures at this time.”

However, Paul Nardo, clerk of Virginia’s House of Delegates, rejected the veto, arguing that Youngkin’s veto of that provision — among others — was not constitutional. According to a letter from Nardo, Youngkin only vetoed the provisions but failed to veto the budget appropriation that contained them. Based on previous Supreme Court rulings, Nardo said, Youngkin needed to veto the entire budget item, not just a provision.

The Virginia Mercury reported in May that Youngkin disagrees with Nardo’s stance and said he intended for the executive branch to operate as if the vetoes were in effect.

The petition says that DMAS ignored the and failed to modify its rates using the methodology the General Assembly commanded. The asks the court to compel DMAS to increase the nursing facility reimbursement rates using the methodology required by the state legislature and accuses DMAS of “illegally” relying on an attempted veto by Youngkin.

“The governor’s unconstitutional veto is having a serious impact on the ability of nursing homes to hire and retain staff,” Hare said in a statement. “This is especially distressing as we know robust Medicaid funding is critical for continued quality care for Virginia’s seniors. Virginia must continue to invest in Medicaid nursing home care, not undermine efforts intended to boost the nursing workforce.”

DMAS did not immediately return requests for comment.

Youngkin’s press secretary, Peter Finocchio, issued the following statement in response: “Nursing homes have received significant Medicaid rate increases in recent budgets, resulting in total payments rising $842 million since 2020. In the current biennial budget, nursing homes received $163 million in increased payments. The new rate increase of $22 million annually passed by the General Assembly in 2025 — and vetoed by Gov. Youngkin — did not link these new funds to increases in quality. Virginians deserve better. And as the governor has previously stated, he believes this veto is wholly consistent with his powers under the Virginia Constitution.”

In its lawsuit, VHCA-VCAL alleges DMAS has taken no steps to modify its calculations using the updated methodology, and that, as a result, nursing homes are receiving less in reimbursements than they should. The association says the lack of funding is harming nursing homes in the state by making it difficult to maintain staffing levels.

Like Nardo, the association argues that while the governor can veto an item within a budget bill, a governor cannot veto a condition of an appropriation without also vetoing the money appropriated.

The association says the Supreme Court of Virginia has jurisdiction to issue a writ of mandamus to compel a government official to comply with a mandatory, nondiscretionary duty.

VHCA-VCAL’s member businesses operate more than 96% of Virginia’s Medicaid nursing facility beds. According to the association, nearly seven in 10 individuals in nursing facilities rely on Medicaid for their care.

Governor launches nursing home oversight board

On Thursday, Youngkin announced a newly established Nursing Home Oversight and Accountability Advisory Board, created by executive order, with an aim of strengthening oversight of nursing homes.

The governor’s office states that the board’s goal is to advise on initiatives to raise standards across nursing homes and recommend policies and practices that improve residents’ well-being and overall quality of care. The advisory board is expected to send the governor an annual report, which includes recommendations on budgetary, legislative and administrative measures.

“Supporting the needs of our older adults remains a top priority for my administration,” Youngkin said in a statement. “This initiative will carefully evaluate the full spectrum of aging and caregiving challenges, focusing on creating well-rounded solutions that address care deficiencies and improve access for our seniors.”

The 20-member board includes professionals with expertise in , direct care, advocacy, law and community service.

In addition to the advisory board, Youngkin’s August executive order directs the state’s health department to develop and maintain a publicly accessible nursing home information portal by Nov. 15, which will display inspection and survey results, disciplinary actions and key facility performance metrics. Youngkin says the aim of the portal is “to provide Virginians with clear and transparent insight into nursing home quality and compliance.”

Wall Street ticks higher with hopes for coming cuts to interest rates

Summary

NEW YORK (AP) — Wall Street is drifting higher on Thursday as the countdown ticks to an update on the U.S. job market coming Friday, one that could clear the way for the cuts to interest rates that investors love.

The S&P 500 rose 0.4% as it clawed back more of its losses since setting an all-time high last week. The Dow Jones Industrial Average was up 180 points, or 0.4%, as of 11:30 a.m. Eastern time, and the Nasdaq composite was 0.4% higher.

Stocks got some lift from easing pressure from the bond market, where Treasury yields fell following the latest reports on the U.S. job market to come in worse than economists expected. One report suggested employers, not including the government, nearly halved their hiring last month. Another said that more workers applied for unemployment benefits last week in an indication of rising layoffs.

Neither number is flashing a recession, and a third report on activity for businesses in the information and other services industries showed a stronger-than-expected acceleration of growth.

The upside for investors of a slowdown in the job market is that it could push the to consider cutting its main interest rate for the first time this year at its next meeting in a couple weeks. Such cuts can give the economy and job market a kickstart, though they can also push inflation higher.

So far this year, the Fed has been keeping its main interest rate on hold because it’s been more worried about inflation potentially worsening because of President Donald ‘s tariffs than about the job market.

“The year started with strong job growth, but that momentum has been whipsawed by uncertainty,” according to Nela Richardson, chief economist at ADP. She said several things could be behind the slowdown, including ”labor shortages, skittish consumers, and disruptions.”

A more comprehensive report on the job market’s health during August will arrive on Friday from the U.S. Labor Department, and it will likely carry much weight with the Fed. Ahead of it, the yield on the 10-year Treasury fell to 4.19% from 4.22% late Wednesday.

Last month’s grim jobs report, which included massive downward revisions for June and May, sent financial markets spiraling and prompted Trump to fire the head of the agency that compiles the monthly data.

On Wall Street, American Eagle Outfitters jumped 32.3% after the teen fashion retailer reported more than double the profit that analysts had expected for its latest quarter. It benefited from a frenzy of media attention in late July over a provocative advertising campaign featuring actor Sydney Sweeney.

The ads — which featured the tagline “Sydney Sweeney has great jeans” — sparked a debate about race, Western beauty standards, and the backlash to “woke” American politics and culture.

Hewlett Packard Enterprise added 5.2% following its own better-than-expected profit report.

T. Rowe Price climbed 6% after announcing a deal where Goldman Sachs plans to buy up to $3.5 billion of its stock, or up to 3.5% of all its shares. They’re teaming up to offer access to some of the private markets where Goldman Sachs is an expert to the retirement savers and other investors that T. Rowe Price serves. Goldman Sachs added 1.3%.

On the losing side of Wall Street was Salesforce, which was one of the heaviest weights on the market despite reporting a better profit than analysts expected. Analysts called the performance solid but suggested some of it may have come from one-time factors. Salesforce, which helps businesses manage their customers, slumped 5.8%.

C3.ai fell 3.2% after reporting a larger loss for the latest quarter than analysts expected. Chairman Thomas Siebel called the results “completely unacceptable,” while announcing a new chief executive for the company, Stephen Ehikian. He was most recently acting administrator of the U.S. General Services Administration.

Figma tumbled 17.9% even though the company, which offers a design and product development platform, reported results for the latest quarter that roughly matched analysts’ expectations. Its forecasts for upcoming revenue also came close to analysts’, but expectations may have been even higher given that its stock came into the day at more than double its $33 IPO price from July.

In stock markets abroad, indexes were mixed across Europe and Asia.

Indexes dropped 1.3% in Shanghai and 1.1% in Hong Kong but jumped 1.5% in Tokyo.

US 30-year mortgage rate dips to 6.5% amid housing slump

Summary

  • Average 30-year U.S. mortgage rate drops to 6.5%
  • Down from 6.56% the previous week, reports
  • Rate was 6.35% a year ago, still higher than pre-2022 levels
  • Elevated keep in slump
  • Lower rates could improve buyer affordability, but sales lag

The average rate on a 30-year U.S. mortgage fell again this week, extending a recent trend that should give prospective  more purchasing power.

The long-term rate eased to 6.5% from 6.56% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.35%.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also fell. The average rate slipped to 5.6% from 5.69% last week. A year ago, it was 5.47%, Freddie Mac said.

Mortgage rates are influenced by several factors, from the ‘s interest rate policy decisions to bond market investors’ expectations for the economy and inflation.

Rates have been mostly declining since late July amid growing expectations that the Fed will cut its benchmark short-term interest rate at the central bank’s meeting of policymakers later this month.

A similar trend happened last year in the leadup to a year ago, when the Fed cut its rate in for the first time in more than four years. At that time, the average rate on a 30-year mortgage got down to a 2-year low of 6.08%, but then climbed again, reaching above 7% by mid-January.

While the Fed doesn’t set mortgage rates, its actions can influence bond investors’ appetite for long-term U.S. government bonds, like 10-year Treasury notes. Lenders use the yield on 10-year Treasurys as a guide to pricing home loans.

The 10-year Treasury yield was at 4.18% at midday Thursday, down from 4.22% late Wednesday.

In a high-profile speech last month, Federal Reserve Chair Jerome Powell signaled the central bank may cut rates soon even as inflation risks remain elevated because of the ‘s tariffs. That’s because of signs that the job market is slowing.

The government’s August job market snapshot is due out Friday.

Still, while a Fed rate cut could give the job market and overall economy a boost, it could also fuel inflation. That could push higher, driving mortgage rates upward in turn.

Hitachi Energy to invest $457M in Virginia expansion

SUMMARY:

  • Hitachi to invest $457 million in , creating 825 jobs
  • Facility will be largest U.S. site for large power transformers supporting AI data centers
  • Investment is part of Hitachi’s $1 billion U.S. grid expansion amid rising energy demand

Hitachi Energy announced Thursday it will invest $1 billion to expand its U.S. grid infrastructure , with roughly half of that investment going into Virginia, where it plans to add 825 jobs.

The electrical equipment manufacturer will invest $457 million to build the nation’s largest manufacturing site for large power transformers in South Boston, Hitachi and announced. The large power transformers to be produced at the plant will support large-scale industrial applications like high-voltage transmission lines, power generation and fast-growing AI data centers.

Construction on the new South Boston plant will commence before the end of 2025 and the new manufacturing facility should be operational by 2028, a Hitachi spokesperson said.

“Thank you, Hitachi Energy, for trusting Virginia again,” the governor said in a statement. “Hard-working Virginians and a business-friendly environment are what first brought Hitachi Energy to the commonwealth. Now, after years of success here, they are doubling down on that decision with this landmark investment in South Boston.”

The new one plant will be built alongside Hitachi’s existing transformer manufacturing facility in South Boston, which has been in operation since 1968 and has 670 employees. In June 2024, Hitachi announced it would invest $26 million to expand that facility, creating about 100 jobs. This April, Hitachi also said it would invest $22.5 million to upgrade its Bland County facility and to add a warehouse in Atkins, creating 120 jobs.

“Power transformers are a linchpin technology for a robust and reliable electric grid and winning the AI race,” Hitachi Energy CEO Andreas Schierenbeck said in a statement. “Bringing production of large power transformers to the U.S. is critical to building a strong domestic supply chain for the U.S. economy and reducing production bottlenecks, which is essential as demand for these transformers across the economy is surging. As the global leader in electrification, Hitachi Energy is uniquely positioned to deliver critical power solutions for the American market.”

The company’s investments in expanding its manufacturing capacity, including at South Boston, “are already creating good-paying American jobs, strengthening local communities, and reinforcing economic independence,”  Schierenbeck added. “At Hitachi Energy, we are deeply grateful for the and support of the , Gov. Youngkin, Virginia’s General Assembly, and the commonwealth’s congressional delegation, who came together to make this critical production capacity possible to power our energy future.”

The Virginia Economic Development Partnership, , the Southern Virginia Regional Alliance and the General Assembly’s Major Employment and Investment (MEI) Project Approval Commission secured the project for the state. Hitachi will be eligible to receive an MEI custom performance grant of $29.4 million for site preparation and facility costs, subject to approval by the General Assembly.

To provide housing options for the new employees Hitachi plans to hire, Youngkin announced that Halifax County and Virginia Housing are partnering to build 96 homes, supported by a grant from the Virginia Workforce Housing Investment Program. The county donated 10 acres of land near the energy facility and will waive permit and connection fees for housing construction.

The new South Boston facility is a component of the $1 billion Hitachi on Thursday announced it would be spending to expand its manufacturing efforts to meet the growing needs of U.S. power grid infrastructure. The company says the investments will help meet “skyrocketing energy demand” driven by AI data centers, which is in line with the Administration’s AI Action Plan that aims to increase electrical supply for the expansion of artificial intelligence.

Reuters reported in Dec. 2024, based on a Department of Energy-backed study, that U.S. data-center power demand could nearly triple in the next three years, consuming as 12% of the country’s electricity.

Headquartered in Switzerland, Hitachi Energy serves customers in the utility, industry, transportation, data centers and infrastructure sectors. In 2024, the company announced plans to invest more than $6 billion globally through 2027 to strengthen the resilience and capacity of the world’s electrical grids. The company employs around 50,000 in 60 countries and generated annual revenue of approximately $16 billion for 2024.

Trump-backed bitcoin company begins trading on Nasdaq

Summary

A bitcoin treasury and mining company linked to the Trump family began trading Wednesday on the Nasdaq stock market.

American Bitcoin’s listing follows a completed merger with Gryphon Digital Mining. The company is backed by President Donald Trump’s sons, and Eric Trump.

“Our Nasdaq debut marks a historic milestone in bringing bitcoin into the core of U.S. capital markets,” Eric Trump said in a statement. He is a co-founder and chief strategy officer of American Bitcoin.

Public companies accumulating bitcoin as a corporate treasury has become a popular trend in crypto as the world’s most popular digital asset is priced near an all-time high. The parent company of Trump’s Truth Social has also moved to accumulate bitcoin.

American Bitcoin said it plans to use “self-mining operations and opportunistic bitcoin purchases” to stand out in a growing field.

Wednesday’s listing gives investors yet another chance to put money in a Trump-linked crypto project. The Trump family has made a heavy pivot from real estate into crypto in the last year with projects ranging from a U.S. dollar-backed stablecoin to the president hawking his own meme coin.

On Monday, another Trump-family backed crypto project, World Liberty Financial, launched public trading of its tokens. The popularity of such projects has put the value of the Trump family’s crypto holdings at several billion dollars, at least on paper.

Democrats have blasted the president for trying to monetize his popularity with crypto investors while also pushing for pro-crypto legislation and regulations. Trump has denied any improper conflicts of interest.

US job openings slip in July, adding to evidence that the American labor market is cooling

Summary

  • U.S. employers posted 7.2M in July
  • Openings fell from 7.4M in June, below forecasts
  • shows continues cooling
  • rose in July, signaling employer caution
  • held steady at 3.2M, showing worker confidence

WASHINGTON (AP) — U.S. employers posted 7.2 million job vacancies in July as the American labor market continues to cool.

The Labor Department reported Wednesday that job openings fell from 7.4 million in June and came in modestly below what economists had forecast. and social assistance companies cut openings by 181,000 and retailers by 110,000.

The Job Openings and Labor Turnover Survey (JOLTS) showed that layoffs rose slightly. The number of Americans quitting their jobs — a sign of confidence in their ability to find better pay, opportunities or working conditions elsewhere — was unchanged from June at 3.2 million.

Jobs openings remain at healthy levels but have fallen steadily since peaking at a record 12.1 million in March 2022 as the U.S. economy roared back from COVID-19 lockdowns.

The U.S. job market has lost momentum this year, partly because of the lingering effects of 11 interest rate hikes by the inflation fighters at the in 2022 and 2023 and partly because President Donald ‘s trade wars have created uncertainty that is paralyzing managers making hiring decisions.

On Friday, the Labor Department will put out unemployment and hiring numbers for August. They are expected to show that businesses, government agencies and nonprofits added nearly 80,000 jobs last month, according to a survey of forecasters by the data firm FactSet. That would mark a modest improvement on the disappointing 73,000 they created in July.

Worse than the lackluster July hiring figures were Labor Department revisions that slashed a stunning 258,000 jobs off May and June payrolls. A furious Trump responded to the bad numbers by firing the head of the Bureau of Labor Statistics, the technocratic agency that compiles the statistics, and nominating a partisan idealogue to replace her.

So far this year, the economy has been generating 85,000 jobs a month, down from 168,000 last year and an average 400,000 a month during the hiring boom of 2021-2023.

In a time of uncertainty, employers are less likely to hire, but they’re not letting workers go either.

In a social media post Heather Long, chief economist at Navy Federal Credit Union, noted that jobs openings in July had come in below the number of U.S. unemployed (7.24 million) for the first time since April 2021. “This is yet another crack in the labor market that illustrates how much harder it is to get a new job right now than what we’ve seen in a long time,” she wrote.