Dow, S&P 500, Nasdaq futures slide on Fed threat as Trump’s DOJ looks into criminal investigation

Bloomberg reports:

The dollar (DX-Y.NYB) fell the most in nearly three weeks as the Federal Reserve faced a grand jury subpoena from the Justice Department, reviving concerns about political interference in monetary policy.

The Bloomberg Dollar Spot Index fell 0.3% on Monday, its biggest drop since Dec. 23. Fed Chairman Jerome Powell revealed that grand jury subpoenas had been served threatening him with criminal charges related to June testimony on the central bank’s headquarters renovation.

… The rising tensions have fueled concerns over central bank autonomy, potentially fueling the bullish options sentiment seen earlier in the year. The dollar opened 2026 with a strong bias, especially against the euro, a marked change from December’s dynamics. This makes short-term positions vulnerable to further unwinding amid recent developments.

The dollar’s status as the world’s reserve currency depends on institutional confidence, Nigel Green, chief executive officer of financial-advisory firm deVere Group, wrote in a note. “History teaches that countries that allow political leaders to dominate central banks pay a heavy economic price.”

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Reuters sourced the following comments from analysts and investors about the Trump administration’s move against Federal Reserve Chairman Jerome Powell:

Vishnu Varathan, Head of Macro Research, Asia Ex-Japan, Mizuho, ​​Singapore

“The Fed independence question is now well and alive and subject to re-evaluation perhaps every few meetings.

“I think I still don’t know how sustained and adversarial the attack on the Fed can be. There could be a scenario where Trump still appoints someone with some credibility and allows this person to run the show — so that’s probably why the markets aren’t panicking yet.”

Andrew Lilly, Chief Rate Strategist at Barrenzoi, Sydney

“Trump is pulling at the loose threads of central bank independence. I don’t even believe he expects Chair Powell to be charged … The only reason he’s taking these steps is because he knows he’s not going to take control of the Fed, so he wants to apply as much unnecessary pressure as possible.

“It’s not good. Don’t get me wrong, but I think it’s going to be nothing. Investors won’t be happy about it, but it really shows that Trump doesn’t have any other levers to pull. The cash rate will stay where the majority of the FOMC wants them.”

Bloomberg reports:

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Bloomberg reports:

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The Associated Press reports:

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