1 week ago
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Updated Mon, January 12, 2026 astatine 3:04 AM CST 2 min read
US banal futures sank aboriginal connected Monday aft Federal Reserve Chair Jerome Powell said the Trump medication has threatened him with a transgression indictment, reigniting concerns implicit the cardinal bank's independence.
Dow Jones Industrial Average futures (YM=F) fell 0.5%, portion those connected the S&P 500 (ES=F) moved down 0.5%. Contracts connected the tech-heavy Nasdaq 100 (NQ=F) led the mode lower, down 0.8% connected the heels of grounds closing highs for Wall Street stocks.
CBOT - Delayed Quote USD
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Investors were rattled precocious Sunday evening aft Federal Reserve seat Jerome Powell released a connection revealing that the Department of Justice had subpoenaed the US cardinal bank.
In a uncommon video, Powell said "the Department of Justice served the Federal Reserve with expansive assemblage subpoenas, threatening a transgression indictment related to my grounds earlier the Senate Banking Committee past June."
Powell suggested the determination was a nonstop onslaught connected the Fed for the mounting of involvement rates that "serve the public" alternatively than "following the preferences of the President."
The important escalation successful Trump’s feud with the Fed seat comes arsenic markets are bracing for the latest user ostentation report, owed Tuesday. The merchandise comes connected the heels of Friday’s December jobs report, which showed continued cooling successful the labour marketplace without signaling a crisp economical slowdown.
Taken together, the information has reinforced expectations that the Federal Reserve volition stay connected clasp for now, with CME FedWatch offering a 95% probability of rates staying the same.
Beyond the economical calendar, geopolitical developments stay a wildcard. Trump is reportedly weighing imaginable enactment involving Iran, portion besides escalating unit connected Cuba implicit Venezuelan lipid shipments. Late past week, Trump besides renewed arguable comments astir Greenland, saying the US could prosecute power of the Danish territory “whether they similar it oregon not.”
Investors are present turning their attraction to the archetypal large catalysts of 2026: net play and cardinal ostentation data. Several of Wall Street’s biggest banks are acceptable to study successful the coming days, including JPMorgan Chase (JPM), Bank of America (BAC), Wells Fargo (WFC), Citigroup (C), Goldman Sachs (GS), and Morgan Stanley (MS).
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Dollar drops by astir successful 3 weeks arsenic Fed gets subpoenas
Bloomberg reports:
The dollar (DX-Y.NYB) declined the astir successful astir 3 weeks arsenic the Federal Reserve faced expansive assemblage subpoenas from the Justice Department, reviving concerns implicit governmental interference successful monetary policy.
The Bloomberg Dollar Spot Index fell 0.3% connected Monday, acceptable for its biggest driblet since Dec. 23. That’s aft Fed Chair Jerome Powell revealed the cardinal slope had been served expansive assemblage subpoenas, threatening a transgression indictment tied to his June grounds connected headquarter renovations.
... Escalating tensions are fueling anxiousness implicit the cardinal bank’s autonomy, perchance upending the bullish options sentiment seen astatine the commencement of the year. The dollar opened 2026 with a beardown bias, peculiarly against the euro, a chiseled displacement from December’s dynamics. That leaves short-term positioning susceptible to a further unwind amid the latest developments.
The dollar’s presumption arsenic the world’s reserve currency depends connected organization trust, Nigel Green, main enforcement serviceman of financial-advisory steadfast deVere Group, wrote successful a note. “History teaches that countries that let governmental leaders to predominate cardinal banks wage a dense economical price.”
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Analyst reactions to DOJ probe into Powell
Reuters sourced the pursuing comments from analysts and investors astir the Trump administration's determination against Federal Reserve seat Jerome Powell:
VISHNU VARATHAN, HEAD OF MACRO RESEARCH, ASIA EX-JAPAN, MIZUHO, SINGAPORE
"The Fed independency question is present good and live and possibly taxable to re-evaluation each fewer meetings.
"I deliberation I'm inactive not definite however sustained and adversarial the onslaught connected the Fed mightiness be. There could beryllium a script wherever Trump could inactive name idiosyncratic with some credibility and let this idiosyncratic to tally the amusement - truthful that's astir apt wherefore markets aren't panicking arsenic yet."
ANDREW LILLEY, CHIEF RATES STRATEGIST AT BARRENJOEY, SYDNEY
"Trump is pulling astatine the escaped threads of cardinal slope independence. I don't adjacent judge that helium expects that Chair Powell volition beryllium charged... The lone crushed that he's taking these steps is that he knows that he's not going to take power of the Fed, truthful helium wants to exert arsenic overmuch undue unit arsenic helium can.
"It is not good. Don't get maine wrong, but I deliberation it volition magnitude to nothing. Investors won't beryllium blessed astir it, but it shows really Trump has nary different levers to pull. The currency complaint will enactment what the bulk of the FOMC wants them to be."
Gold reaches grounds precocious arsenic Fed independency comes into focus
Bloomberg reports:
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Jerome Powell announces the DOJ has subpoenaed the Federal Reserve
Bloomberg reports:
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Trump says helium whitethorn support ExxonMobil retired of Venezuela implicit idiosyncratic feelings connected CEO comments
Associated Press reports:
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