The war between the White House and the Federal Reserve has moved from mean tweets to grand jury subpoenas.
Trump DOJ Targets Powell with Criminal Probe as Gold hits $4,600
12 January 2026 - 09:15 CET
US President Donald Trump has launched a criminal investigation into Fed Chairman Jerome Powell. In a video statement released by the central bank on Sunday Powell confirmed that the Department of Justice served the Federal Reserve with subpoenas on Friday.
The probe focuses on testimony Powell gave to the Senate Banking Committee last June regarding a $2.5bn renovation of historic Fed office buildings. However the Chairman was blunt about the true motivation behind the legal action.
"This unprecedented action should be seen in the broader context of the administration's threats and ongoing pressure," Powell said. "This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions."
The video on X has already been viewed 32mn times.
Market meltdown
Global markets reacted violently to the threat against central bank independence.
Gold prices surged 2% after the Asia open to hit a record $4,600 an ounce as investors fled fiat currency for hard assets. Bitcoin rose 1.7% overnight to $92,500 before paring gains. The logic is simple: if the President controls the Fed the dollar is no longer a neutral store of value.
In a short interview with NBC News on Sunday Trump denied personal involvement in the probe but offered no support for Powell.
"I don’t know anything about it but he’s certainly not very good at the Fed and he’s not very good at building buildings," Trump said. "What should pressure him is the fact that rates are far too high."
Shadow QE
The attack on Powell coincides with a direct attempt by the White House to bypass the Fed entirely.
Separately Trump announced on Truth Social that he is instructing Fannie Mae and Freddie Mac to launch a $200bn purchase program for mortgage-backed securities.
He stated the goal is to drive monthly payments down and restore affordability.
Economists view this as "shadow quantitative easing." By ordering government-sponsored entities to buy bonds the President is effectively injecting liquidity into the market by fiat. It signals that the executive branch is no longer waiting for the Fed to pivot but is seizing the levers of monetary policy directly.
