Federal Reserve Chair Jerome Powell made an unprecedented public statement on January 12, 2026, revealing that the US Department of Justice was undertaking a criminal investigation into him concerning congressional testimony about a Fed building renovation project. Powell vehemently asserted that this investigation was a 'pretext' designed by the Trump administration to exert political pressure and force the central bank into cutting interest rates, thereby compromising the Fed's crucial independence. He emphasized that the issue was whether the Fed could set interest rates based on economic conditions or if monetary policy would be swayed by political intimidation. This development marked a significant escalation in the long-standing feud between President Donald Trump and Powell over the direction of monetary policy, a conflict dating back to Powell's first term as Chair in 2018. Trump had consistently criticized Powell for not lowering interest rates aggressively enough. The immediate market reaction was noteworthy: gold prices surged to a record high, hitting $4,600 an ounce as investors sought safe-haven assets. Concurrently, the US dollar weakened, and Wall Street stock futures experienced a downturn, although some analysts described the overall market response as measured rather than panicked. The events underscored deep concerns among economists and investors regarding the sanctity of central bank independence and its implications for global financial stability.