Investors are growing increasingly anxious over a renewed 'make-or-break fight' for the independence of the U.S. Federal Reserve, following a startling development involving its chair, Jerome Powell. The U.S. Justice Department has launched a criminal investigation related to Powell's testimony before the Senate in June regarding renovations to the Fed's headquarters. Powell himself has dismissed this probe as an 'unprecedented action' and a 'pretext' by the Trump administration to exert political influence and pressure the central bank into lowering interest rates faster. This move has ignited widespread concern among financial markets and prominent economic figures. Gold prices surged to a record high of $4,640 an ounce, while the dollar dipped and stocks slipped, signaling clear investor anxiety over the potential erosion of the Fed's autonomy. Critics argue that compromising the Fed's independence could have severe economic consequences, potentially leading to unchecked inflation and undermining global financial stability. Former Fed chairs, including Alan Greenspan, Ben Bernanke, and Janet Yellen, along with other senior officials and economists, have issued a joint statement condemning the Justice Department's investigation. They labeled it an 'unprecedented attempt to use prosecutorial attacks to undermine that independence,' drawing parallels to monetary policy practices in emerging markets with weak institutions. Yellen, Powell's predecessor, emphatically called the investigation 'extremely chilling' for central bank independence and urged markets to be more alarmed, dismissing any notion of Powell lying to Congress. Democratic Senator Elizabeth Warren also weighed in, stating that Trump's attempts to control the Fed 'undermine America' and urged the Senate to halt consideration of any Trump nominees for the Fed. This ongoing dispute highlights fundamental questions about whether the Fed's crucial interest rate decisions will continue to be based on economic data and evidence, or succumb to political pressures from the White House, with significant implications for the U.S. and global economy.