Just when one thinks that this year was going to calm down compared to the tariff insanity and bizarre economic policies of 2025, the Trump administration says “here, hold my beer” and launches the most insane event in the past 20 years regarding the Federal Reserve.
Video message from Federal Reserve Chair Jerome H. Powell: https://t.co/5dfrkByGyX pic.twitter.com/O4ecNaYaGH
— Federal Reserve (@federalreserve) January 12, 2026
Full statement from the Federal Reserve website tonight:
Good evening.
On Friday, the Department of Justice served the Federal Reserve with grand jury subpoenas, threatening a criminal indictment related to my testimony before the Senate Banking Committee last June. That testimony concerned in part a multi-year project to renovate historic Federal Reserve office buildings.
I have deep respect for the rule of law and for accountability in our democracy. No one—certainly not the chair of the Federal Reserve—is above the law. But this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.
This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress’s oversight role; the Fed through testimony and other public disclosures made every effort to keep Congress informed about the renovation project. Those are pretexts. The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President.
This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation.
I have served at the Federal Reserve under four administrations, Republicans and Democrats alike. In every case, I have carried out my duties without political fear or favor, focused solely on our mandate of price stability and maximum employment. Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people.
Thank you.
I’m a tad older than most so I’ve witnessed and studied some incredible things in my adulthood of just over 40 years since college.
But from a historical perspective, this is the most incredible thing I have ever witnessed regarding America’s central bank and the political struggle engaged in by this administration which appears to have lost it’s ever loving mind.
The consequences of the announcement was an almost immediate rise in the price of gold of over $100 per ounce, the USD dollar declining against other banana republic currencies, and equity markets slightly shaken as all of the war discussions which were bad enough do not compare to a direct frontal attack using the US Government against the Federal Reserve.
Long ago after the trade wars began I anointed Trump as “President Instability” and thus far he has not failed to disappoint.
Based on the current trajectory however, he could end up putting us into a massive recession, currency collapse, and World War III before the midterms.
Got gold?
P.S. – I apologize to all of my readers for my absence again. I am dealing with some medical issues and will be posting as I can. Hopefully these will be resolved this month. Thank you for your patience.
