One key element of the U.S.-Japan trade pact raises more questions than answers about the future of the two nations' economic relationship.

The big picture: A reported $550 billion investment commitment from Japan would reflect a massive surge in the nation's financial exposure to the United States. But no one in either the Japanese or U.S. government has articulated key details about how it would really work.

• In U.S. officials' description of the commitments, Trump would have the discretion to direct the investment funds and the U.S. would receive 90% of the profits.
• It's unclear what legal entities — on either the Japanese or U.S. side — would be involved, or what would be in it for Japanese companies if they have neither control over the investments nor a financial return.

Catch up quick: A White House fact sheet said Trump will direct the funds toward revitalization of the U.S. industrial base, including energy infrastructure, semiconductor manufacturing, critical minerals, pharmaceuticals and shipbuilding.

By the numbers: It's worth emphasizing just how big $550 billion is — nearly 14% of Japan's 2024 GDP.

• Japan is already the single-largest source of foreign direct investment in the United States, with a cumulative capital of $754 billion deployed as of last year. It's been rising rapidly, too — nearly doubling over the last decade.

Reality check: That has been driven by Japanese companies voluntarily making investments on which they expect to earn a handsome return — think of the Toyota manufacturing plant in Georgetown, Kentucky, which reflects about $10 billion in investment as of early last year.

• But those kinds of projects don't spin up overnight. The initial groundbreaking on the Toyota plant was in 1986.
• Japanese FDI in the U.S. increased by about $54 billion in 2024, a huge 7.7% surge, but the contemplated investment fund is more than 10 times that size.

Similarly, Japan is the biggest owner of U.S. Treasury securities — with $1.1 trillion as of May. But those purchases are directed by the Japanese government to manage the nation's own currency and reserves, not at the behest of the U.S. president.

• The Bank of Japan buys U.S. bonds with the full expectation of interest earnings and principal being paid back.

What they're saying: "They came to us with the idea of a Japan-U.S. partnership, where they are going to provide equity, credit guarantees and funding for major projects in the U.S.," Treasury Secretary Scott Bessent said on Bloomberg TV yesterday.

• A White House official tells Axios that "the shape and timeframe here are still TBD, but it's effectively an investment vehicle whose cash the Japanese will put up, and whose investments will be directed by the President into the sectors we have prioritized."

The other side: "The vague promises about Japan investing $550 billion in the U.S. and Americans receiving '90% of the profits,' are the kind of fantastical claims better suited for a campaign rally than a serious trade announcement," wrote Veronique de Rugy, a senior research fellow at the Mercatus Center, in a note.

Trump will tour the Fed's construction site this afternoon.

Why it matters: Read that sentence again. It is a surprising twist in the White House's criticism of the cost overruns of the Fed's renovation project — drama that Trump has said could be grounds to fire chair Jerome Powell, before walking back the threat.

Details: Trump will visit the site at 4pm ET, according to a schedule released by the White House last night that allocates more than an hour for the visit.

• It comes after social media demands for a tour from Federal Housing Finance Agency director Bill Pulte, who has also been Powell's lead antagonist.
• Pulte called on Powell to resign this morning, continuing a series of posts on X that lambast the Fed chair over the building renovations and keeping interest rates on hold.

What to watch: The White House and Republicans have unloaded on the Fed over its building reconstruction, accusing the central bank of lavish renovations.

• The White House is trying to gauge whether the Fed's renovations are out of step with plans approved by the National Capital Planning Commission (NCPC) in 2021 — and thus a violation of a law governing National Mall construction.
• The Fed says the project is necessary for a first-in-a-century renovation and that it is not subject to approval by the NCPC.

The intrigue: There is something symbolic about Trump's visit to the Fed. He has pushed the boundaries of the distance that presidents have traditionally put between the White House and the central bank.

• The visit is not unprecedented, though the context of the trip is historically unmatched.
• Former President George W. Bush was the last to visit the Fed in 2006 to swear in then-Fed chair nominee Ben Bernanke. It had only happened twice before that: in 1975 by Gerald Ford and in the late 1930s, when Franklin Delano Roosevelt delivered an address at the building's opening.