White House: President Trump's Trade Agenda Is Rebuilding the American Auto Industry
WASHINGTON, Aug. 20 -- The White House issued the following news:
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President Trump's Trade Agenda Is Rebuilding the American Auto Industry
Ford Motor Company announced it will reshore production of its Lincoln models to the United States -- phasing out imports from China and creating thousands of new American jobs. This is the latest proof that President Donald J. Trump's America First trade agenda is delivering exactly as designed: rewarding domestic manufacturing, protecting American workers, and rebuilding America's supply chains.
Ford CEO Jim Farley was unambiguous: "We made this
... Show Full Article
WASHINGTON, Aug. 20 -- The White House issued the following news:
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President Trump's Trade Agenda Is Rebuilding the American Auto Industry
Ford Motor Company announced it will reshore production of its Lincoln models to the United States -- phasing out imports from China and creating thousands of new American jobs. This is the latest proof that President Donald J. Trump's America First trade agenda is delivering exactly as designed: rewarding domestic manufacturing, protecting American workers, and rebuilding America's supply chains.
Ford CEO Jim Farley was unambiguous: "We made thisdecision as soon as the policy of the Administration was set."
Ford joins a rapidly expanding roster of automakers expanding their U.S. footprint and returning production to American soil:
* Toyota is investing $3.6 billion to shift Tacoma production from Mexico to its San Antonio, Texas, plant -- creating 2,000 high-quality jobs and doubling the facility's size.
* Honda is producing its next-generation Civic in Indiana rather than Mexico to avoid tariffs -- locking in approximately 210,000 units of annual U.S. output.
* General Motors is investing $4 billion to move production of the Chevrolet Blazer and Equinox from Mexico to plants in Tennessee and Kansas, while shifting Buick Envision production from China to Kansas -- boosting domestic capacity by hundreds of thousands of vehicles.
* Mercedes-Benz is investing $4 billion to expand SUV production at its Tuscaloosa, Alabama, plant -- citing tariffs as the key driver.
* Volvo Trucks has invested hundreds of millions of dollars to launch production of the new VNR regional hauler at its New River Valley facility in Dublin, Virginia.
* Stellantis is making the largest single investment in its 100-year U.S. history to expand domestic manufacturing by 50% -- launching five new vehicles and creating more than 5,000 jobs across plants in Illinois, Ohio, Michigan, and Indiana.
* Nissan is maximizing capacity at its Tennessee manufacturing plant -- one of the largest and most productive in North America -- adding models and sustaining thousands of American jobs.
* Hyundai Motor Group is boosting annual capacity at its Metaplant America in Ellabell, Georgia, as part of broader multi-billion-dollar U.S. investments aimed at producing the vast majority of vehicles sold here domestically.
* Rolls-Royce is investing $75 million to boost engine production at its Aiken, South Carolina, facility, and recently completed a $24 million expansion of its Mankato, Minnesota, plant.
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President Trump's America First agenda is scoring a decisive victory over decades of offshoring. Companies that once chased cheap labor overseas are now pouring capital into U.S. plants -- delivering vehicles Made in America, by American workers, for American consumers.
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Original text here: https://www.whitehouse.gov/releases/2026/08/president-trumps-trade-agenda-is-rebuilding-the-american-auto-industry/
Secretary of State Rubio Issues Statement on Hungary National Day
WASHINGTON, Aug. 20 -- The U.S. State Department issued the following statement by Secretary Marco Rubio on Hungary National Day:
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On behalf of the United States of America, I send my warmest wishes to the people of Hungary as you celebrate your National Day.
As Hungary commemorates St. Stephen's Day and the founding of your nation, we are reminded of the historic ties between our peoples. The friendship between the United States and Hungary rests on the foundation of a mutual respect for sovereignty, proud heritage, and the hard-won liberties that define our two republics.
Today, the
... Show Full Article
WASHINGTON, Aug. 20 -- The U.S. State Department issued the following statement by Secretary Marco Rubio on Hungary National Day:
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On behalf of the United States of America, I send my warmest wishes to the people of Hungary as you celebrate your National Day.
As Hungary commemorates St. Stephen's Day and the founding of your nation, we are reminded of the historic ties between our peoples. The friendship between the United States and Hungary rests on the foundation of a mutual respect for sovereignty, proud heritage, and the hard-won liberties that define our two republics.
Today, theUnited States reaffirms its strong and forward-looking partnership with Hungary, one sustained by deep economic ties, shared security interests, and a commitment to the values that have long united the West.
May the bonds between the United States and Hungary continue to allow both our nations to prosper.
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Original text here: https://www.state.gov/releases/office-of-the-spokesperson/2026/08/hungary-national-day-2/
Secretary of State Rubio Issues Statement on Advancing U.S. Campaign to Address Threat Posed by International Criminal Court
WASHINGTON, Aug. 20 -- The U.S. State Department issued the following statement on Aug. 18, 2026, by Secretary Marco Rubio:
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Advancing the United States' Campaign to Address the Threat Posed by the International Criminal Court
The Trump Administration has been clear: the International Criminal Court (ICC) is a corrupt and fatally politicized supranational court that has maliciously abused its authority and exceeded its mandate. We will not tolerate its assault on state sovereignty.
In furtherance of the diplomatic campaign we launched last month to address the ICC's abuses of power,
... Show Full Article
WASHINGTON, Aug. 20 -- The U.S. State Department issued the following statement on Aug. 18, 2026, by Secretary Marco Rubio:
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Advancing the United States' Campaign to Address the Threat Posed by the International Criminal Court
The Trump Administration has been clear: the International Criminal Court (ICC) is a corrupt and fatally politicized supranational court that has maliciously abused its authority and exceeded its mandate. We will not tolerate its assault on state sovereignty.
In furtherance of the diplomatic campaign we launched last month to address the ICC's abuses of power,I am designating two ICC officials - President of the ICC, Tomoko Akane of Japan, and ICC Senior Trial Lawyer, Abdoulaye Seye of Senegal - pursuant to Executive Order 14203, "Imposing Sanctions on the International Criminal Court." These individuals have directly engaged in efforts by the ICC to investigate, arrest, detain, or prosecute officials whose government has not consented to ICC jurisdiction.
The ICC has repeatedly attempted to assert authority over nationals of the United States and other countries that have not consented to its jurisdiction or ratified the Rome Statute. This sets a dangerous precedent for all nations.
Our whole of government campaign to dismantle the threat posed by the ICC to national sovereignty will be sweeping and we expect more countries to join our campaign by ending their funding and participation in this politicized and unaccountable court. The ICC's ability to target American nationals and those of other non-States Parties must end. The Trump Administration stands ready to take additional measures, if necessary, to systematically dismantle the ICC until it is incapable of threatening American sovereignty.
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These individuals are being designated pursuant to section 1(a)(ii)(A) of Executive Order (E.O.) 14203.
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Original text here: https://www.state.gov/releases/office-of-the-spokesperson/2026/08/advancing-the-united-states-campaign-to-address-the-threat-posed-by-the-international-criminal-court/
Lawrence Livermore National Laboratory: 3D-Printed Ceramic Waveguide Lasers Could Surpass the Power of Glass Fiber Lasers by 10 Times
LIVERMORE, California, Aug. 20 (TNSjou) -- The U.S. Department of Energy Lawrence Livermore National Laboratory issued the following news:
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3D-printed ceramic waveguide lasers could surpass the power of glass fiber lasers by 10 times
At the bottom of the ocean, optical fibers transmit telecommunications and internet data across the world. Waveguides make that feat possible by channeling and amplifying the light -- and therefore the data within -- over enormous distances.
And the technology goes beyond undersea cables. Waveguiding optics are among the most important advances in photonics
... Show Full Article
LIVERMORE, California, Aug. 20 (TNSjou) -- The U.S. Department of Energy Lawrence Livermore National Laboratory issued the following news:
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3D-printed ceramic waveguide lasers could surpass the power of glass fiber lasers by 10 times
At the bottom of the ocean, optical fibers transmit telecommunications and internet data across the world. Waveguides make that feat possible by channeling and amplifying the light -- and therefore the data within -- over enormous distances.
And the technology goes beyond undersea cables. Waveguiding optics are among the most important advances in photonicssince the invention of the laser. They are fundamental to the structure of glass fiber lasers, which are used for high-power national security applications like counter-drone laser systems and missile defense.
Now, researchers at Lawrence Livermore National Laboratory (LLNL) have fabricated a first-of-a-kind all-ceramic waveguide with 3D printing. The work was published in Optics Letters (https://opg.optica.org/ol/fulltext.cfm?uri=ol-51-8-2192).
"With further development, this crystalline architecture could enable more than a tenfold increase in output power over glass fibers while retaining a compact footprint," said LLNL scientist and author Ross Osborne.
Waveguides exploit the phenomenon of total internal reflection with two regions: a core and a cladding material that surrounds that core. As light travels and bounces through the core, it spreads out. When it hits the cladding, it is reflected back into the core.
Typically, waveguides are made from silica glass. A crystalline ceramic version could tolerate higher power output, improve heat dissipation and suppress instabilities. Until now, methods to fabricate such a waveguide were cumbersome and unreliable, often creating very short or poor-quality waveguides.
LLNL's novel method uses direct ink write printing to address that challenge. The technique squeezes filaments of ytterbium-doped yttrium aluminum garnet within an undoped garnet ceramic matrix.
"We developed a direct ink writing additive-manufacturing technique for fabricating ceramics with highly tailored structures," said Osborne. "The process begins with a nanoparticle paste that is extruded into a three-dimensional shape. The printed structure is then dried, sintered and hot isostatically pressed to produce a transparent ceramic."
The team created three waveguides contained in a single ceramic block and demonstrated high-efficiency laser performance. Because the waveguide core and cladding are fabricated in tandem as a single structure, the approach offers high fabrication yield and minimizes defects at the interface between core and cladding.
The channel waveguide lasers described in the paper were tested in collaboration with the DEVCOM Army Research Laboratory in Maryland. The authors continue to hone the process, and they plan to eventually scale the output power from hundreds of milliwatts to kilowatts. Ultimately, they aim to make the waveguide and its production process commercially viable for high-power applications such as laser machining and national defense.
In addition to funding from the Army, the fundamental capability was developed with Laboratory Directed Research and Development support.
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Original text here: https://www.llnl.gov/article/54836/3d-printed-ceramic-waveguide-lasers-could-surpass-power-glass-fiber-lasers-10-times
Fed: Liquidity Transformation Risks in U.S. Bank Loan and High-Yield Mutual Funds - 2026 Update
WASHINGTON, Aug. 20 -- The Federal Reserve issued the following Fed Notes article:
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Liquidity Transformation Risks in U.S. Bank Loan and High-Yield Mutual Funds: A 2026 Update
By Kenechukwu Anadu, Sean Baker, Fang Cai, Logan George, and Erik Larsson/1
1. Introduction
Mutual funds (MFs) and other open-ended collective investment funds engage in liquidity transformation--they offer investors daily redemptions while investing in assets that may take longer than a day to sell without significant price impact. This activity is particularly salient for corporate debt funds, where large investor
... Show Full Article
WASHINGTON, Aug. 20 -- The Federal Reserve issued the following Fed Notes article:
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Liquidity Transformation Risks in U.S. Bank Loan and High-Yield Mutual Funds: A 2026 Update
By Kenechukwu Anadu, Sean Baker, Fang Cai, Logan George, and Erik Larsson/1
1. Introduction
Mutual funds (MFs) and other open-ended collective investment funds engage in liquidity transformation--they offer investors daily redemptions while investing in assets that may take longer than a day to sell without significant price impact. This activity is particularly salient for corporate debt funds, where large investorredemptions during stress periods could result in fire sales that adversely affect underlying markets (see, e.g., Goldstein, Jiang, and Ng, 2017; Chernenko and Sunderam, 2020; Falato, Goldstein, and Hortacsu, 2021; Federal Reserve Board, 2025).
Using MF holdings data reported on the Securities and Exchange Commission's (SEC) Forms N-Q and N-CSR, Anadu and Cai (2019) developed a simple liquidity and illiquidity ratio for monitoring the liquidity characteristics of the largest bank loan (BL) and high-yield corporate (HY) MFs./2 They showed that, from 2007 to 2019, the average BL MF increased its holdings of illiquid assets, while maintaining relatively stable liquid assets. In contrast, the average HY MF's illiquid assets declined modestly, while its liquid assets remained roughly unchanged.
In this note, using the more granular SEC Form N-PORT data, which replaced N-Q in 2020, we update the liquidity monitoring metrics from Anadu and Cai (2019) in several ways. First, we increase the fund coverage substantially to all BL and HY MFs./3 Second, we expand the numerator of the liquidity ratio from cash and cash equivalents to also include U.S. Treasury Bills (T-Bills) and Short-Term Investment Vehicles (STIVs)./4 Finally, we examine MF net flows by ex-ante liquidity ratio levels during two stress episodes: the April 2025 tariff shock and the March 2020 onset of the pandemic. This flow analysis helps us better understand whether precautionary liquidity management practices at these MFs help mitigate redemption risks.
We show that the median liquidity ratios for BL and HY MFs have remained relatively stable in recent years. The median illiquidity ratio for BL MFs has risen to near the levels last observed during the pandemic; the analogous ratio for HY MFs has declined since the pandemic. For BL MFs specifically, this dynamic--stable liquidity ratios amid rising illiquidity ratios--suggests increased liquidity transformation risk, on balance. To be sure, our illiquidity measure (Level 3 assets) captures only one extreme dimension of illiquidity, rather than the full illiquidity profile of a fund's portfolio. Thus, these measures provide only a partial view of portfolio liquidity.
Following the April 2 "Liberation Day" announcement, both BL and HY MFs with above-median liquidity ratios ex-ante experienced larger weekly outflows than those with below-median liquidity ratios, on average./5 This pattern is broadly consistent with the literature on MFs -- particularly those holding illiquid assets or facing large outflows -- strategically manage liquidity, including by holding higher liquid assets, to avoid fire sales (see, e.g., Chernenko and Sunderam, 2016).
March 2020, however, showed a reverse pattern for BL MFs: those with above-median liquidity ratios ex-ante experienced lower monthly net outflows. Nonetheless, this, too, is consistent with pandemic-era empirical evidence on MF redemption dynamics (see, e.g., Claessens and Lewrick, 2021; Hespeler and Suntheim, 2020). These contrasting observations suggest that the relationship between an MF's liquidity characteristics and redemption patterns is somewhat conditional on the nature of the market stress.
The rest of this note proceeds as follows. Section 2 describes the growth of HY and BL MFs since 2020. Section 3 presents analysis of the liquidity and illiquidity ratios of HY and BL MFs. Section 4 examines MF net flows by liquidity characteristics in April 2025 and March 2020. We conclude in Section 5.
2. Size of BL and HY MFs
Figure 1 reports the net assets in BL and HY MFs. From 2019 Q4 to 2025 Q4, BL MFs' net assets declined by $19 billion (21 percent) to $71 billion (Panel A). In contrast, HY MFs' assets rose by 13 percent to $263 billion (Panel B)./6
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Figure 1. Net Assets of Bank Loan and High-Yield Mutual Funds
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Consistent with their investment strategies, BL and HY MFs invest primarily in bank loans and non-investment-grade corporate bonds, respectively--relatively illiquid asset classes./7 However, both fund types hold relatively small fractions of liquid assets, such as cash and T-Bills. This combination of illiquid or less liquid securities and limited liquid assets could create potential challenges when funds face large redemption pressures.
Next, we examine the trends in liquidity and illiquidity ratios for these funds.
3. Monitoring Tools: Liquidity and Illiquidity Ratios
Our liquidity ratio is the sum of an MF's cash and cash equivalents, T-Bills, and STIVs, divided by its total net assets. The illiquidity ratio is the fraction of a fund's total net assets that comprise Level 3 assets./8 The illiquidity ratio captures only the most extreme dimension of illiquidity--securities with no observable market prices--rather than the full spectrum of a fund's liquidity profile./9
The data are from SEC Form N-PORT, which succeeded Form N-Q in 2020./10
Like Anadu and Cai (2019), we focus on the time-series trends of these measures, not their point estimates. We take this approach because the heterogeneity in MFs' asset classification practices could bias our measures. For example, some funds may include illiquid assets, such as commercial paper, as "cash and cash equivalents," which biases our liquidity ratio upwards, on balance. For the illiquidity measure, the likely "fluidity" between Level 2 and Level 3 assets could result in an underestimation of a fund's illiquidity ratio. Nonetheless, by consistently monitoring these measures, we shed light on how aggregate liquidity transformation activities in MFs are evolving, including in response to shocks./11
3.1 BL MFs
The liquidity ratio for the median BL MF increased from 2020, reaching almost ten percent of net assets in 2021 (Figure 2, Panel A). It began to decline thereafter and has remained relatively stable at about four-and-a-half percent since 2024; the range between the 5th and 95th percentiles has narrowed since 2021.
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Figure 2. Liquidity and Illiquidity Ratios for Bank Loan Mutual Funds
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Figure 2, Panel B shows that the illiquidity ratio for the median BL MF rose to over one percent in 2020, declined thereafter, and, since 2025, has been approaching levels seen during the pandemic-era spike. Taken together, Panels A and B suggest that, in recent years, the liquidity transformation risk in the median BL MF has increased, on balance; the level of illiquid assets has ticked up from post-pandemic lows against the backdrop of a relatively stable liquid asset ratio.
3.2 HY MFs
Turning to HY MFs, in contrast to BL MFs, the liquidity ratio for the median HY MF has been relatively stable--at about four percent--since 2020 (Figure 3, Panel A). Similarly, the illiquidity ratio for the median HY MF has been relatively flat and the percentile range has narrowed notably since 2020 (Figure 3, Panel B). Thus, for HY MFs, liquidity transformation activity appears to have declined, on balance, in recent years.
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Figure 3. Liquidity and Illiquidity Ratios for High-Yield Mutual Funds
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4. Case Studies
Next, we examine whether MFs with higher (lower) ex-ante liquidity ratios tend to experience lower (larger) net redemptions during market stress periods, on average. This flow analysis can help us better understand whether precautionary liquidity management practices at these MFs help mitigate redemption risks during market stress periods.
4.1 April 2025: The tariff-induced market volatility
Table 1 reports the net flows for BL MFs during the tariff-induced market volatility of April 2025. Focusing on the week after the Liberation Day announcement, on April 2, BL MFs with above-median liquidity in the quarter before April 2025 experienced higher net outflows in early April than below-median liquidity MFs, on average (Column 4). However, the difference between the group averages is not statistically significant.
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Table 1: April 2025 Average Net Flows for BL MFs by Liquidity
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Our results are similar for HY MFs. Table 2 shows that, in the week of April 2, on average, HY MFs with higher ex-ante liquidity experienced larger net outflows than lower-liquidity ones (Column 4).
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Table 2: April 2025 Average Net Flows for HY MFs by Liquidity
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Taken together, these observations are generally consistent with the literature, which suggests that riskier, less liquid MFs tend to hold larger liquidity buffers strategically to absorb redemption shocks (see, for example, Chernenko and Sunderam, 2016).
4.2 March 2020: COVID-19 pandemic
Tables 3 and 4 report the net flows for BL and HY MFs, respectively, during the COVID-19 period. In March 2020, BL MFs with below-median ex-ante liquidity ratios experienced significantly larger monthly net outflows, on average, than above-median-liquidity ones (Table 3, Column 4).
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Table 3: March 2020 Average Net Flows for BL MFs by Liquidity
Table 4: March 2020 Average Net Flows for HY MFs by Liquidity
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The divergence of 2020's flow-liquidity observations from 2025's (and the broader literature) has some grounding in relatively recent work on MF flow dynamics during the pandemic. For example, Claessens and Lewrick (2021) show that, in March 2020, corporate bond MFs with higher liquid asset ratios ex-ante tended to experience larger net outflows, although this cohort, on average, experienced lower net outflows during normal periods. Similarly, Hespeler and Suntheim (2020) show that, during non-COVID-19 periods, an increase in cash and cash equivalents was associated with an increase in net flows. This relationship weakens during the pandemic period.
For HY MFs, those with below-median liquidity ratios experienced slightly lower net outflows, on average, than those with above-median liquidity (Table 4, Column 4); however, the difference is not statistically significant.
5. Conclusion
We update Anadu and Cai (2019) by substantially expanding the sample of HY and BL MFs for which liquidity and illiquidity ratios are computed and using more granular SEC Form N-PORT data available since 2020. These simple measures help shed some light on how liquidity transformation risks are evolving in the aggregate for corporate debt MFs. Evidence from the March 2020 and April 2025 episodes suggests that while MFs' precautionary liquidity risk management strategies could effectively mitigate redemption risks under normal market volatility, they alone might be insufficient to explain market dynamics during extraordinary shocks like the COVID-19 pandemic.
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6. References
Anadu, K., and Cai, F. (2019). Liquidity Transformation Risks in U.S. Bank Loan and High-Yield Mutual Funds. FEDS Notes.
Bao, J., Pan, J., and Wang, J. (2011). The Illiquidity of Corporate Bonds. The Journal of Finance Volume LXVI, No. 3.
Chernenko, S. and Sunderam, A. (2016). Liquidity transformation in asset management: Evidence from the cash holdings of mutual funds. NBER Working Paper.
Chernenko, S. and Sunderam, A. (2020). Do fire sales create externalities? Journal of Financial Economics Volume 135, Issue 3, Pages 602-628.
Claessens, S., and Lewrick, U. (2021). Open-ended bond funds: systemic risks and policy implications. BIS Quarterly Review.
Falato, A., Goldstein, I., and Hortacsu, A. (2021). Financial fragility in the COVID-19 crisis: The case of investment funds in corporate bond markets. Journal of Monetary Economics Volume 123, Pages 35-52.
Federal Reserve Board. (2025). Financial Stability Report.
Financial Accounting Standards Board. (2006). Fair Value Measurement (Topic 820).
Goldstein, I., Jiang, H., and Ng, D. (2017). Investor flows and fragility in corporate bond funds. Journal of Financial Economics Volume 126, Issue 3, Pages 592-613.
Hespeler, F., and Suntheim, F. (2020). The Behavior of Fixed-income Funds during COVID-19 Market Turmoil. IMF Global Financial Stability Notes.
Larsson, E., Kawamura, T., and Shin, C. (2026). Measuring Mutual Fund Liquidity with N-PORT. FEDS Notes.
1. Authors: Anadu, Ken.Anadu@bos.frb.org; Baker, Sean.Baker@bos.frb.org; Cai, Fang.Cai@bos.frb.gov; George, Logan.E.George@frb.gov; and Larsson, Erik.G.Larsson@frb.gov. We thank Bill Bassett, Nicola Cetorelli, John Levin, Siobhan Sanders, and Chaehee Shin for helpful comments and suggestions. The views expressed in this note are ours and do not necessarily reflect those of the Federal Reserve Bank of Boston, the Federal Reserve Board of Governors, or the Federal Reserve System. Return to text
2. N-Q was a quarterly portfolio holdings report, and N-CSR is a semi-annual certified shareholder report. Return to text
3. Anadu and Cai's (2019) sample includes the ten largest BL and HY MFs, which, respectively, represented 62 percent and 45 percent of the BL and HY sectors, as of July 2018. Return to text
4. Larsson, Kawamura, and Shin (2026) also use N-PORT data to define Short-Term Liquid Assets Ratio of corporate bond MFs. Return to text
5. See, https://www.whitehouse.gov/presidential-actions/2025/04/regulating-imports-with-a-reciprocal-tariff-to-rectify-trade-practices-that-contribute-to-large-and-persistent-annual-united-states-goods-trade-deficits/. Return to text
6. According to Morningstar Direct data, from 2019 to 2025 BL and HY MFs saw net outflows of $23 billion (27% of assets) and $15 billion (6% of assets), respectively. Return to text
7. In the case of corporate bond illiquidity, see, for example, Bao, Pan, and Wang (2011). Return to text
8. Level 3 assets are valued using significant unobservable inputs, which require management's best estimates. Thus, these assets are difficult to value and typically illiquid. In contrast, Level 1 assets are valued using quoted prices in active markets; Level 2 assets are valued using observable inputs other than Level 1 quoted prices (see, Financial Accounting Standards Board, 2006). Return to text
9. Other factors, such as market depth, are not observed in our analysis. Thus, our measure provides only a partial view of portfolio liquidity; moreover, funds with few Level 3 holdings may nonetheless face liquidity pressures if they hold substantial Level 2 assets or concentrated positions in thinly traded securities. Return to text
10. The SEC adopted Form N-PORT in February 2016. MFs were given staggered compliance dates based on their size and fiscal quarter end dates. Large funds began filing in October 2019, while small funds began in April 2020. Form N-PORT requires filers to report detailed portfolio-related information, such as individual holdings and total assets and liabilities, to the SEC monthly. On February 18, 2026, the SEC amended this reporting requirement to quarterly, effective in November 2027 for larger funds and in May 2028 for smaller ones. See, https://www.sec.gov/newsroom/press-releases/2026-19-sec-proposes-amendments-reduce-burdens-eporting-fund-portfolio-holdings. Return to text
11. The SEC rules prohibit MFs from purchasing illiquid assets if the sum of their illiquid assets is greater than 15 percent. Funds are required to privately notify the SEC (not the public) when they breach the 15 percent illiquid-asset threshold. As these data are not public, our measure fills a gap in monitoring MFs illiquid (hard-to-value) asset levels. Return to text
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Please cite this note as:
Anadu, Kenechukwu, Sean Baker, Fang Cai, Logan George, and Erik Larsson (2026). "Liquidity Transformation Risks in U.S. Bank Loan and High-Yield Mutual Funds: A 2026 Update," FEDS Notes. Washington: Board of Governors of the Federal Reserve System, August 19, 2026, https://doi.org/10.17016/2380-7172.4123.
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Disclaimer: FEDS Notes are articles in which Board staff offer their own views and present analysis on a range of topics in economics and finance. These articles are shorter and less technically oriented than FEDS Working Papers and IFDP papers.
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Original text here: https://www.federalreserve.gov/econres/notes/feds-notes/liquidity-transformation-risks-in-u-s-bank-loan-and-high-yield-mutual-funds-a-2026-update-20260819.html
Connecting the Power of the Stars to Geometry: PPPL Tests an Innovative Fusion System Concept That Could Change the World
WASHINGTON, Aug. 20 -- The U.S. Department of Energy Princeton Plasma Physics Laboratory issued the following news:
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Connecting the power of the stars to geometry: PPPL tests an innovative fusion system concept that could change the world
In the world of fusion energy, scientists and engineers study the fourth state of matter known as plasma in an effort to design and build a new type of power plant. Relying on the heat produced by two small atoms smashing together, a network of such facilities would help create a novel source of stable electricity and help ensure America's energy independence.
... Show Full Article
WASHINGTON, Aug. 20 -- The U.S. Department of Energy Princeton Plasma Physics Laboratory issued the following news:
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Connecting the power of the stars to geometry: PPPL tests an innovative fusion system concept that could change the world
In the world of fusion energy, scientists and engineers study the fourth state of matter known as plasma in an effort to design and build a new type of power plant. Relying on the heat produced by two small atoms smashing together, a network of such facilities would help create a novel source of stable electricity and help ensure America's energy independence.And while scientists in this endeavor are devoting their attention to complex machinery and temperatures hotter than the surface of the sun, they are also trying to determine the best designs for such a power plant by focusing on geometry.
In fusion systems, shape matters. The earliest device designed by Lyman Spitzer Jr., the founder of the U.S. Department of Energy's Princeton Plasma Physics Laboratory (PPPL), was shaped like a figure eight. A later system, known as the tokamak, was developed in the 1960s and shaped like a doughnut, in an effort to keep the plasma confined by creating a central electrical current that formed vital confining magnetic fields. Other fusion devices were shaped like straight lines or twisty crullers.
Additionally, some fusion systems look like cored apples. Known as spherical tokamaks, they resemble doughnut-like tokamaks that have been compressed, making the hole down the center far narrower than before. Scientists have found that spherical tokamaks have properties that could confine plasma energy more efficiently than conventional tokamaks. These properties could help generate a plasma with the necessary temperature and density for a sufficient amount of time to create a fusion that heats itself, like a mini star on Earth.
Spherical tokamaks can also confine a relatively large plasma pressure for a given magnetic field strength. That ratio of plasma pressure to magnetic pressure is known as beta; achieving a high beta is a long-standing goal because it reflects efficient use of the confining magnetic field. This matters for designing fusion power plants since producing strong magnetic fields can be expensive. A high beta means a plant can reach the plasma pressures it needs with less magnetic field, easing one of the costliest engineering demands.
Designed to be the most powerful spherical tokamak in the world
PPPL will study the capabilities of spherical tokamaks using its primary fusion experiment: the National Spherical Torus Experiment-Upgrade (NSTX-U). The largest spherical tokamak in the United States and designed to be the most powerful spherical tokamak in the world, NSTX-U boasts a list of impressive statistics.
* Its central magnet bundle will use up to 4 million amps of electrical current to produce 1 tesla of magnetic field strength. In comparison, a typical lightning bolt has only 30,000 amps, and 1 tesla is 20,000 times more powerful than the magnetic field at Earth's surface.
* It will use cutting-edge artificial intelligence (AI) systems to improve its performance.
* It will allow scientists to study the large amounts of heat that will flow within fusion power plants.
With these capabilities, NSTX-U aims to access the highest plasma stored energy of any spherical tokamak to date.
NSTX-U will also have state-of-the-art measurement systems, or diagnostics, that capture key features of the plasma, such as temperature and density, providing critical insights to advance fusion energy science. It will be an international user facility - public and private institutions and companies will use NSTX-U as a test bed to verify how new materials and components perform when exposed to plasma and to establish trusted AI tools for real-time data analysis and control.
Spherical tokamaks have special properties that boost fusion operations
Some scientists are excited about spherical tokamaks because they have a combination of characteristics that could make the concept a good option for future fusion power plants. Those characteristics fall into three broad categories.
Advantage 1 - Small size
Spherical tokamaks are attractive concepts because they are relatively compact and therefore require less building material for their construction. "If you have to build something like a regular tokamak that has a much larger diameter, you have to use a lot more steel, concrete and copper, among other things," said Jack Berkery, deputy director for NSTX-U research. "So a spherical tokamak's relatively small size means it's theoretically cheaper to construct."
Advantage 2 - Better performance due to enhanced magnetic pressure
Unlike stars, which confine plasma using gravity, fusion systems on Earth must hold plasma using magnetic fields. Spherical tokamaks confine plasma remarkably well for the relatively modest magnetic fields they use.
The reason for this good confinement is complex. The spiraling magnetic field lines in a spherical tokamak thread throughout the device, but they end up wrapping around the central magnet bundle more than they do around the outer edge. This configuration allows the field lines to expose more of their convex, curved shape to the plasma. For technical physics reasons, these convex magnetic field lines help stabilize the plasma, calming large, unwanted motion, or instabilities, that can dissipate the plasma energy.
"Think of water in a bathtub," said Stefan Gerhardt, PPPL senior managing research physicist. "If you're taking a bath and moving around a lot, you can create a big wave that can grow and make the water unstable."
By stabilizing the plasma and enabling it to retain more of its heat, the convex magnetic field line surfaces simultaneously increase the plasma's pressure. That's because high temperatures generate high pressures. Spherical tokamaks, therefore, can put plasma under greater amounts of pressure and foster more fusion reactions by reducing heat loss, all without adding more power to the magnets.
Advantage 3 - Spinning to reduce turbulence
But large instabilities aren't the only type of unwanted plasma motion that can interfere with fusion reactions. The plasma also has smaller perturbations that can become persistent wiggles. "Think of them like smaller ripples on the surface of water," Gerhardt said. Scientists seek to prevent these wiggles because, like the larger instabilities, they can move heat out of the plasma, which reduces both temperature and pressure and makes fusion reactions less likely.
Spherical tokamaks are somewhat shielded from this effect because their plasma can rotate relatively quickly. As the plasma rotates -- pushed by beams of neutral atoms that scientists use to help heat the plasma -- different parts of the plasma move at different speeds. That means that one part of the ripple will move more quickly than another part, elongating it and causing it to stretch until it has broken apart. Once broken, they can no longer move particles and heat out of the plasma as easily.
"Spherical tokamaks have an advantage because scientists can make the plasma within them spin more easily than the plasma within regular tokamaks, and that's because of the plasma's smaller size," said Steven Cowley, PPPL director. "In addition, because the magnetic field lines on the outside of the device are at an angle, you get a better, more effective shearing effect. That effect, which is what breaks up the ripples, is simply stronger in spherical tokamaks."
NSTX-U will help planning for future fusion power plants
Once NSTX-U is operational, scientists will use it to determine whether the confinement time -- the amount of time that heat is contained in the plasma before it is lost -- continues to increase in spherical tokamaks as the devices approach power plant conditions. "We want to study whether this property continues to improve as we go toward a reactor or if it kind of flattens out," Berkery said, "because that projection will make a big difference for a future device. You want to have a high density, a high temperature and a high confinement time -- that's the triple product that fusion researchers talk about."
In doing so, they will try to determine which type of tokamak shape improves performance best. If a compact shape produces the best performance, exactly how compact should it be? "If we're going to build spherical tokamak power plants, then understanding the right aspect ratio to make more cost-effective fusion is critical," Gerhardt said.
NSTX-U will be central to answering this significant question.
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PPPL is mastering the art of using plasma -- the fourth state of matter -- to solve some of the world's toughest science and technology challenges. Nestled on Princeton University's Forrestal Campus in Plainsboro, New Jersey, our research ignites innovation in a range of applications including fusion energy, nanoscale fabrication, quantum materials and devices, and sustainability science. The University manages the Laboratory for the U.S. Department of Energy's Office of Science, which is the nation's single largest supporter of basic research in the physical sciences. Feel the heat at https://energy.gov/science and https://www.pppl.gov.
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Original text here: https://www.pppl.gov/news/2026/connecting-power-stars-geometry-pppl-tests-innovative-fusion-system-concept-could-change
Comptroller Gould Discusses Digital Asset Innovation, GENIUS Next Steps
WASHINGTON, Aug. 20 -- The U.S. Department of the Treasury Office of the Comptroller of the Currency issued the following news release on Aug. 19, 2026:
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Comptroller Gould Discusses Digital Asset Innovation, GENIUS Next Steps
Comptroller of the Currency Jonathan V. Gould today discussed the Office of the Comptroller of the Currency's (OCC) work under the leadership of President Donald J. Trump and U.S. Secretary of the Treasury Scott Bessent to support the Administration's efforts to grow the economy and lead the global digital currency revolution, in a Fireside Chat at the Wyoming Blockchain
... Show Full Article
WASHINGTON, Aug. 20 -- The U.S. Department of the Treasury Office of the Comptroller of the Currency issued the following news release on Aug. 19, 2026:
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Comptroller Gould Discusses Digital Asset Innovation, GENIUS Next Steps
Comptroller of the Currency Jonathan V. Gould today discussed the Office of the Comptroller of the Currency's (OCC) work under the leadership of President Donald J. Trump and U.S. Secretary of the Treasury Scott Bessent to support the Administration's efforts to grow the economy and lead the global digital currency revolution, in a Fireside Chat at the Wyoming BlockchainSymposium in Jackson Hole, Wyoming.
Excerpts from Comptroller Gould's discussion are below. His full discussion can be found here (https://www.youtube.com/watch?v=kMRZxSA7mDM).
On de novo chartering and digital assets
Since President Trump took office, so over the last 18 or so months, we have received 40 applications for new bank charters in this country. Over half of those bank charters in the business plans for those bank charters involve some form of digital asset activity. So that's 23 out of 40. That's an eightfold increase from the four years of the Biden administration. So that tells you about where the puck is going. We are now seeing when we look out further, when I look out further to the pipeline of potential applicants for bank charters, it is becoming ordinary course to involve and integrate payment stablecoins, etc. in the business plans that we are now seeing presented to the OCC for consideration.
On the GENIUS Act
We were working on the rule even before the President actually signed the bill into law. We will have a final rule out by November, so we are working with great speed here.
We are witnessing the birth of a new industry in the form of payment stablecoins.
Looking ahead
We're very excited about the prospect of stablecoins and our role in that regulatory and supervisory landscape. It actually brings us back to our original mission back in the 1860s when we were created, which is ensuring that the reserve assets backing then national bank issued notes were of the same level of quality. That's exactly analogous to what Congress has tasked us with doing with respect to payment stablecoins.
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Original text here: https://occ.gov/news-issuances/news-releases/2026/nr-occ-2026-69.html
