A significant escalation in the conflict between Donald Trump and Federal Reserve Chair Jerome Powell is unfolding, raising serious concerns about the independence of the U.S. central bank. The Economic Times reports that this clash centres on the Justice Department serving subpoenas threatening a criminal indictment against Powell related to his Senate testimony. Powell has publicly labeled this investigation a "pretext" designed to pressure the Federal Reserve into lowering interest rates, a long-standing demand from Donald Trump who equates economic success with headline growth and rising stock markets. Multiple credible sources corroborate the severity of this unprecedented confrontation. Reuters and Connecticut Public Radio highlight Powell's unusually combative response, accusing the administration of interfering with the Fed's decision-making. The Atlantic Council emphasizes that this move is a "shocking escalation" and that the threat of criminal charges directly stems from the Fed's commitment to setting interest rates based on economic data rather than political preferences. This comes amidst Trump's consistent push for lower interest rates to stimulate the American economy, potentially before upcoming elections. The implications for India's economy are a key focus of the analysis. Initially, a sharp fall in the U.S. dollar and expectations of aggressive Fed easing could benefit emerging markets like India by boosting capital inflows and supporting the rupee. Indian equities and bonds might respond positively as global investors seek higher yields. However, this upside could be fragile. If U.S. policy uncertainty leads to higher long-term Treasury yields and a politicized Fed erodes confidence, it could force foreign investors to reduce their exposure to emerging markets, potentially resulting in capital outflows from India or increased market volatility. A weaker rupee and higher inflation could ensue if the Reserve Bank of India attempts to counter a strong dollar by printing more rupees. The situation underscores the global interconnectedness of monetary policy and political independence.