Overview
- Jerome Powell said the Justice Department served grand jury subpoenas tied to his June Senate testimony on a $2.5 billion Fed renovation, describing the move as leverage to force rate cuts.
- U.S. stock futures fell, the dollar weakened and safe havens rallied, with gold hitting a record above $4,600 an ounce and silver surging as investors reassessed policy risk.
- Treasury yields edged higher as traders weighed the prospect of political interference, even as futures pricing only modestly increased expectations for cuts this year.
- Political fallout intensified as Republican Sen. Thom Tillis and Democratic Sen. Elizabeth Warren signaled plans to block Fed nominees until the legal dispute is resolved.
- Powell’s term ends in May, sharpening the succession fight; President Trump told NBC he didn’t know about the probe and denied using it to sway rates, while tensions over Iran added to safe-haven flows.