In a move that could reshape the financial landscape, President Donald Trump has signed an executive order establishing a Sovereign Wealth Fund (SWF) for the United States. The fund, under the oversight of the Treasury and Commerce Departments, will manage national assets with the aim of stabilizing the economy and creating long-term value. Treasury Secretary Scott Bessent has emphasized the strategic importance of the fund, suggesting it will have a significant impact on the nation’s future economic prosperity.
The new SWF will be managed by Bessent and Howard Lutnick, who has been nominated as the Commerce Secretary. The team will work on establishing the fund over the next 12 months, with the ambitious goal of monetizing the U.S.’s balance sheet. According to Bessent, the fund will consist of a combination of liquid assets and domestic investments to generate wealth for the American people.
While the fund’s primary purpose is economic stabilization, the prospect of using it to acquire significant assets has raised eyebrows. During the Oval Office signing, President Trump hinted that the U.S. might use the SWF to purchase the popular social media app, TikTok, which has been at the center of a geopolitical battle between the U.S. and China. Trump suggested that the fund could potentially facilitate such an acquisition, showcasing the fund’s strategic potential beyond mere economic management.
Breaking: #Trump signs executive order creating first ever US Strategic Soverign Wealth Fund pic.twitter.com/dDUHIQNS8q
— MartyParty (@martypartymusic) February 3, 2025
What Is Sovereign Wealth Fund?
A Sovereign Wealth Fund (SWF) is a state-owned investment fund, typically made up of assets like stocks, bonds, real estate, or other investments. SWFs are usually established from surplus revenues, often derived from resource exports or trade surpluses, with the aim of managing national savings or providing economic stability. Globally, over 90 sovereign wealth funds exist, managing assets worth over $8 trillion. Notably, Norway’s SWF is the largest in the world, managing over $1.7 trillion in assets, while China’s sovereign fund holds $1.3 trillion.
The creation of a U.S. SWF, however, comes at a time when the country is running a budget deficit. For the fund to be officially launched, approval from Congress is required. Despite this, the administration remains optimistic, with Bessent declaring that the goal is to launch the fund within the next year.
The establishment of the U.S. Sovereign Wealth Fund is a bold step toward potentially reshaping America’s economic future, but its implications—especially with regard to international acquisitions like TikTok—remain to be seen. As the fund’s formation unfolds, all eyes will be on how it could impact both the U.S. economy and global markets.
ALSO READ: US Hospitals Stop Gender-Affirming Care For Transgender Youth After Trump Order