Overview
- U.S. prosecutors have opened a criminal investigation into Federal Reserve Chair Jerome Powell, according to reporting that sent markets on the defensive.
- Powell said the administration threatened him with a criminal indictment and confirmed the Fed received grand jury subpoenas tied to headquarters renovations, calling the move a pretext to pressure rate cuts.
- The dollar index slipped about 0.3% to 98.899, the greenback fell below 158 yen and to roughly $1.1660 per euro, and S&P 500 futures declined about 0.5%.
- Gold surged to a record above $4,600 an ounce, Treasury futures rose with the 10-year implied yield near 4.15%, and fed funds futures priced in a few extra basis points of cuts for 2026.
- The flare-up sharpened tensions between the Fed and the White House as traders also tracked a strong recent jobs report, unrest in Iran that lifted haven demand, and the upcoming U.S. CPI release.