Donald Trump has launched a shock criminal probe into Federal Reserve chief Jerome Powell, sparking market mayhem. The US dollar tumbled while gold prices soared as the fight over the Fed’s independence exploded into chaos.
Dollar Dives, Gold Rockets to Record
On Monday, the US dollar slid 0.36% against key currencies. Meanwhile, gold surged a jaw-dropping 1.9%, smashing records at $4,600 per troy ounce.
Safe-haven silver also soared, reflecting fears over inflation and doubts about the Fed’s autonomy.
Justice Dept Drops Grand Jury Subpoenas on Fed
The controversy heated up last Friday when the US Justice Department hit the Federal Reserve with grand jury subpoenas. Investigators demand Powell’s June 2025 Senate testimony and details on Fed office renovations.
Powell fought back in a Sunday video, insisting the probe isn’t about renovations or testimony but is a direct threat to the Fed’s independence from presidential meddling.
“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates on our best assessment of what will serve the public rather than following the preferences of the President,” Powell declared.
Experts Warn: Trump’s Fed Attack is Dangerous
Neil Wilson, UK strategist at Saxo, blasted Trump’s move as “truly unprecedented,” warning it risks White House control over interest rates.
Goldman Sachs chief economist Jan Hatzius warned at the 2026 Global Strategy conference that the probe “reinforced worries about the Fed’s independence being under fire.”
Still, Hatzius remains confident Powell will stick to economic data, not political pressure.
Trump’s Relentless Fed Feud Rumbles On
- August: Trump unsuccessfully tried to oust Fed governor Lisa Cook over alleged false mortgage claims.
- September: He appointed an ally to the Federal Open Market Committee pushing for faster, bigger rate cuts.
- Ongoing: Trump ridicules Powell on Truth Social, nicknaming him “Jerome ‘Too Late’ Powell” for cautious hikes.
- Powell’s term ends in May, but the bitter row shows no signs of cooling.
