Highlights of the week: Musk may return to politics, ECB pause, Trump comes to the Fed

US President Donald Trump has struck a trade agreement with Japan, securing $550 billion in investment in the US economy. And towards the end of the week, he paid a visit to the Fed. The ECB left its key rate unchanged after eight cuts. In the technology market, the race to invest in AI continues: Alphabet announced an increase in capital expenditure to $85 billion to avoid ceding the lead to other players. About the main events from July 21 to July 25 - in our review. 

The European Central Bank, on Thursday, July 24 kept its key rate unchanged after eight cuts over the past year, reports Reuters. The regulator's decision matched analysts' expectations. The key deposit rate remained at 2%, half the rate it was a year ago. 

The central bank noted that inflation has reached its 2% target and forecasts point to its stabilization at that level in the medium term. Despite this,  the ECB preferred to wait with further actions while the EU and the US are trying to agree on a trade deal, writes Reuters. 

Earlier, Donald Trump threatened to impose 30% duties on European goods from August 1 and set a minimum levy of 15-20% on them. The prime rate on all US imports is now 10%. In turn, the European Union prepared a package of retaliatory measures concerning American goods worth 72 billion euros.  

"While it seems that the parties may agree on some sort of deal before [August 1], it is not at all guaranteed. Even if an agreement is reached, it is likely to be quite vague and with minimal details. So the ECB will want to see exactly what the parties come to, if anything, before taking the next step," accounts Richard Carter, head of debt market research at Quilter Cheviot.

What else is there to read about it?"

- How did the market react to the ECB decision and what do economists think? This was written by correspondent Victoria Sirota, "'The situation is extremely uncertain': the ECB left the rate unchanged for the first time in a year".

- Why 2025 has become a turning point in the development of the political and economic bloc of the European Union, written by journalist Peter Kiryan in the article "Between Two Fires: How the EU was drawn into a conflict with both the United States and China";

US President Donald Trump on Thursday, July 24, made a surprise visit to the Federal Reserve headquarters, which is undergoing renovations. Wearing a construction helmet, he toured the construction site accompanied by the head of the Federal Reserve Jerome Powell.

This is their first face-to-face meeting since Trump associates and White House officials began publicly criticizing the Fed chief earlier this month over the Fed's $2.5 billion Fed building renovation project.MarketWatch wrote that Trump could use this as a reason to fire Powell. The U.S. president has for months criticized the Fed chief for refusing to cut rates and regularly hints at the possibility of his early dismissal. 

There was a brief altercation between the two on Thursday over the cost of the project, with Trump saying it had allegedly risen to $3.1 billion, but Powell immediately interrupted him in front of reporters. "You just added a third building," he said, standing next to Trump. And he clarified that the president's calculations included the cost of another building where work was completed several years ago.

During the visit, Trump also continued to push for lower interest rates, saying he and Powell had "talked a little bit about rates" and expressed confidence that the U.S. central bank chief would "do the right thing." The Fed's next rate meeting, will be held on July 29-30.

At the same time, he tried to soften his tone toward the Fed chief and distanced himself from the idea of firing him. "Firing him is a serious step, and I don't think it's necessary right now," Trump later added. 

What else is there to read about it?"

- The possible contenders for the post of the Fed chief were previously written by journalist Ekaterina Komarova in the Oninvest piece "Lower rates, be active and look good: how Trump chooses a new Fed chief".

The U.S. has reached a trade agreement with Japan, and it includes a reduction in duties on imports of cars to the States - from 27.5% to 15%, and for other Japanese goods - from 25% to 15% from August 1, wrote Reuters. In return, Japan agreed to invest $550 billion in the U.S. economy.

It is the most sweeping agreement in a series of deals Donald Trump has struck since April after the trade war began. Under the deal, Japan will buy 100 Boeing planes and increase defense purchases from U.S. companies from $14 billion to $17 billion, the White House said.

U.S. Treasury Secretary Scott Bessent explained on a Bloomberg broadcast that Japan received a favorable duty rate because of an "innovative financing mechanism" that he believes other countries won't be able to replicate.

The announcement of the deal on Tuesday evening, July 22, caused Japan's Nikkei stock index to surge nearly 4% to a one-year high. Toyota shares jumped more than 14%, while Honda shares jumped nearly 11%. 

Artificial intelligence startups raised $104.3 billion in the U.S. in the first half of 2025 - almost as much as in all of 2024, CNBC reported, citing PitchBook data. Nearly two-thirds of all venture capital funding in the U.S. now goes to AI companies - up from 49% in the same period last year. But despite the impressive amount of investment, most investors are still waiting for their returns.

According to PitchBook, venture capital firms made 281 deals in the first half of the year to sell their stakes in startups - worth $36 billion. In most cases, startups bought larger companies and integrated them into their structure. A rare exception was CoreWeave's IPO at the end of the first quarter.

OpenAI continues to lead the AI investment boom with rounds of record funding and impressive valuations. In March, OpenAI raised a record $40 billion in a round led by SoftBank. Also in June, Meta invested $14.3 billion in Scale AI to hire its co-founder and CEO Alexander Wang. Anthropic raised $3.5 billion, and Safe Superintelligence, a startup founded by OpenAI co-founder Ilya Sutzkever, raised $2 billion.

What to read on this topic?"

- The founder of Scale AI was discussed by journalist Roman Mighty in article  "The man who knows how to be a friend: Alexander Wang, creator of the $14 billion Meta superintelligence".

In the latest tender offer of SpaceX company, founded by Ilon Musk, there was a warning in the section "risks": the billionaire may get involved in political activities again. This was written on July 22 by Bloomberg, which familiarized with the document. Musk previously headed the Department of Government Efficiency (DOGE) as a senior adviser to U.S. President Donald Trump. In the future, he may take up a similar role, devoting considerable time and effort to this work, the documents suggest. Sources on condition of anonymity told the agency about the same.

Musk himself said this week that Tesla is expecting some challenging quarters. The comment came after reporting a second quarter that was one of the worst for the company in a decade, reported by Bloomberg. Tesla on July 23 reported a 16% drop in quarterly revenue from its automotive segment to $16.7 billion. Total revenue fell 12% to $22.5 billion versus LSEG's forecast of $22.74 billion. 

According to Musk, the pressure on the company is intensified by the loss of subsidies for electric cars in the U.S., as well as slow progress in launching unmanned technology. The company's securities have already lost more than 20% since the start of 2025, despite a short-term recovery in the spring.

What else is there to read about it?"

- What reaction on Wall Street was caused by the Tesla report, Oninvest correspondent Vladislav Osipov wrote in the article ""Tesla's main asset is Musk"". How did analysts react to the weak report?"

Alphabet, Google's parent company, ended the second quarter with strong revenue growth amid an ongoing AI boom, reports Bloomberg. However, demand for AI products requires a sharp increase in capital spending, with the company announcing that it will total $85 billion in 2025 - $10 billion more than its previous plan. 

Alphabet's quarterly results were above expectations in almost all areas. Revenue excluding partnership payments rose to $81.7 billion, while the consensus forecast of Bloomberg analysts was $79.6 billion. The search business performance amounted to $54.2 billion against the expected $52.9 billion. Google's cloud division brought $13.6 billion in revenue and $2.8 billion in operating profit - today it is the key driver of the company's growth. The only weak link was the Other Bets business (including, in particular, Waymo robot cab service), which brought only $373 million in revenue against the forecast of $429.1 million.

Alphabet shares sagged in the post-market after the report was published on July 23, but jumped 4.1% in after-hours trading the next day. Alphabet CEO Sundar Pichai was quick to explain to investors that investments in AI infrastructure are "critical to meet growing demand from cloud customers."

What to read about it?"

- What do analysts say about Alphabet's report? Oninvest correspondent Albert Fakhrutdinov wrote in article  "Alphabet's revenues beat forecasts, but investors were alarmed by a sharp rise in AI costs".

Goldman Sachs and Bank of New York Mellon have teamed up to launch digital tokens backed by stakes in money market funds, reported Reuters. 

Institutional investors can now buy and sell money market fund units on BNY's LiquidityDirect platform, and information about these units will be recorded on the Goldman Sachs blockchain system as a digital record of ownership. This is expected to greatly simplify the use of these assets as collateral and speed up the settlement process.

The move reinforces Wall Street's push to integrate blockchain technology into traditional finance. The tokenization of the $7.1 trillion money market fund market is the next step in the development of digital assets after the U.S. passed the GENIUS Act, wrote CNBC.

"The scale of this market is a tremendous opportunity to improve the efficiency of the entire financial infrastructure," accounts Goldman Sachs head of digital assets Matthew McDermott. 

What to read about Stablecoins?"

- Why the GENIUS Act is a law not only about stablecoins, but also about how to help the U.S. economy, told by Arbat Capital Advisory Services Limited (UK) analyst Alexei Golubovich and Arbat Capital analyst Denis Chigarev in "How the new 'Genius Act' on stablecoins leads to the creation of shadow money supply".

This article was AI-translated and verified by a human editor