Overview
- Jerome Powell said the Justice Department served grand jury subpoenas and threatened him with indictment related to his June Senate testimony on a Fed building project, which he labeled a political pretext.
- The New York Times reported that federal prosecutors opened a criminal investigation into the Fed chair, and no charges have been announced.
- Markets reacted with the dollar down roughly 0.2%–0.3%, U.S. equity futures lower, gold reaching a record above $4,600 an ounce, and futures pricing adding a few more basis points of rate cuts.
- Treasury futures pointed to slightly lower yields, while analysts warned that perceived erosion of central bank independence could unsettle currencies and broader risk assets.
- Senator Thom Tillis said he would block confirmation of any Federal Reserve nominee until the matter is resolved, and President Trump told NBC News he did not know about the investigation.