#FedOfficialsSpeak
📰 LATEST BREAKING NEWS: Fed Chair Powell Faces DOJ Investigation
Key developments (January 12, 2026):
Federal Reserve Chair Jerome Powell revealed that the U.S. Justice Department has issued grand jury subpoenas and threatened a criminal indictment linked to his testimony regarding a $2.5 billion Fed headquarters renovation project. Powell called these actions a “pretext” aimed at pressuring the Fed to lower interest rates.
Reuters
The DOJ opened a criminal investigation, focusing on Powell’s remarks to Congress about the renovation cost overruns. Critics worry this represents political interference in Federal Reserve independence.
The Washington Post
Prosecutors’ moves have sparked market nervousness: gold prices jumped and the U.S. dollar weakened, as investors reassess the central bank’s autonomy.
Financial Times
Powell and some lawmakers emphasize the importance of data-driven policy decisions rather than political influence, calling the probe politically motivated.
AP News
Republican Senator Thom Tillis criticized the actions and vowed to block new Fed nominees until the dispute is resolved, intensifying political tensions around central bank leadership.
Reuters
Why it matters:
This situation is extraordinary—a senior central banker under potential legal threat tied to internal operations. Markets typically hate uncertainty; any perception of political pressure on monetary policy can amplify volatility in stocks, bonds, and FX markets.
📊 Technical & Market Impact — Analysis
Although the current headlines focus on political/legal controversy, broader Federal Reserve commentary and minutes from late 2025 still matter for markets’ policy expectations
Recent Fed communications and market pricing suggest that interest rate cuts remain more likely than hikes in 2026, but the timing is highly disputed among officials.
Investing
Fed minutes show participants seeing the economy with caution, balancing inflation progress against labor market softening and uncertainty.