Powell’s Fed Up

The Department of Justice has issued subpoenas that could lead to an indictment of Federal Reserve Chair Jay Powell, reigniting a long‑running dispute over the $2.5 billion Fed‑building renovation. Powell’s public statement framed the investigation as a pretext aimed at eroding the central bank’s independence, a theme that resonates with market participants wary of political interference. Analysts see the move as a test of how far Congress and the executive branch will go to influence monetary policy, especially with Powell’s term ending in May and a potential Supreme Court challenge looming.

The latest employment data underscores a mixed labor market. December’s jobs report showed a modest payroll increase but a decline in the unemployment rate to just below 4.4 percent, suggesting that hiring remains soft while the broader economy continues to grow at a 4.3 percent annualized pace. This resilience limits pressure on the Fed to accelerate rate cuts, yet political voices argue for more accommodative policy to safeguard growth. Consequently, investors are watching the January policy meeting closely, weighing whether the Fed will prioritize inflation control or respond to the lingering employment weakness.

Geopolitical tension in Iran has reignited oil market volatility. Protests and government crackdowns threaten supply routes, pushing crude prices higher for the first time since October despite Venezuela’s expected output surge. With two OPEC members facing internal unrest, analysts at Goldman Sachs project further price declines later this year, citing a global supply overhang. Traders therefore balance short‑term disruption risk against longer‑term bearish fundamentals, a dynamic that could shape equity and commodity allocations in the coming months.