Stock Market Investors Just Got Alarming News on President Trump's Fight With Fed Chair Jerome Powell

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RegExp("[?&]notifications=1(&|#|$)");"desktop"===y&&i&&b.test(window.location.search)&&(i.checked=!0)};ge("ybar-mod-notification",(function(e){var t={isUH3:"crunch"===e.getConfig().ytheme,notifContainer:document.getElementById("notification-container"),notifBadge:document.getElementById("notif-badge"),notifMenu:document.getElementById("ybarNotificationMenu"),notifMenuOpener:document.querySelector("#ybarNotificationMenu + label"),notifDropdown:document.getElementById("notifDropdownContainer"),tooltipContainer:document.querySelector(".".concat($n)),notifLabel:document.querySelector(".".concat(Xn))};t.notifDropdown&&so(e,t)}))}()}};]]>Trevor JennewineWed, January 14, 2026 at 9:32 AM GMT+1 5 min readKey PointsThe Justice Department is investigating Fed Chair Jerome Powell in what experts say is an attempt by the Trump administration to undermine the Fed's independence.President Trump has repeatedly lashed out at Powell during his second term, hoping to push the Federal Reserve into lowering interest rates to suit his political agenda.If investors think the central bank's independence has been compromised, Treasury yields would probably soar and the stock market may decline sharply.10 stocks we like better than S&P 500 Index ›The S&P 500 (SNPINDEX: ^GSPC) inched higher on Jan. 12, despite reports that U.S. prosecutors are investigating Federal Reserve Chair Jerome Powell concerning his testimony about the ongoing renovation of two central bank buildings.News of the probe drew criticism from Wall Street, former Fed and Treasury officials, and some Republican lawmakers. President Trump has denied involvement, despite repeatedly berating Powell since taking office and threatening to sue Powell for "gross incompetence" as recently as late December.Investors should be concerned because the Justice Department's investigation seems like another attempt to undermine the Federal Reserve's independence. Even the perception that monetary policy decisions are being manipulated by politicians could be devastating for the stock market.Image source: Official White House Photo by Andrea Hanks.President Trump has made no secret of his desire for lower interest rates. The severe tariffs imposed by his administration threaten to slow economic growth, and federal debt recently exceeded $38 trillion for the first time. Lower interest rates would not only offset economic weakness caused by higher tariffs but also reduce the cost of servicing government debt.Importantly, while other presidents have attempted to influence the Federal Reserve's stance on monetary policy, Trump has pushed harder than any predecessor, often by threatening legal action or berating officials on social media.April 2025: When Powell warned that tariffs could lead to worse inflation and higher unemployment, a situation known as stagflation, Trump threatened to fire Powell. The president also attacked Powell on social media, calling him a "major loser."June 2025: Expecting the Federal Open Market Committee (FOMC) to hold interest rates steady at the June meeting, President Trump lashed out at Powell ahead of the decision, calling him a "stupid person" and a "numbskull" [sic].August 2025: Trump tried to remove Fed Governor Lisa Cook over alleged mortgage fraud in 2021, despite federal law prohibiting the removal of Fed governors for any reason except misconduct in office. The Supreme Court later determined that Cook could keep her job.December 2025: Powell's term as Fed chairman ends in May, and Trump has outlined qualities his replacement must possess. "I want my new Fed chairman to lower interest rates if the market is doing well," he wrote on social media. "Anybody that disagrees with me will never be the Fed chairman." Trump also threated to sue Powell for incompetence.January 2026: The Department of Justice served the Fed with grand jury subpoenas that threatened criminal indictments concerning Powell's testimony last June. Powell called the investigation a pretext intended to pressure policymakers into lowering interest rates.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,973.34 +46.74 (+0.67%)Dow 3049,560.13 +410.50 (+0.84%)Nasdaq23,679.79 +208.04 (+0.89%)Russell 20002,685.16 +33.52 (+1.26%)VIX15.37 -1.38 (-8.23%)Gold4,623.20 -12.50 (-0.27%)Trending tickersTSM Taiwan Semiconductor Manufacturing Company Limited 344.10 +16.99 (+5.19%)SPHL Springview Holdings Ltd 16.75 +14.45 (+628.26%)LLY Eli Lilly and Company 1,034.23 -39.06 (-3.64%)AMC AMC Entertainment Holdings, Inc. 1.6250 +0.0750 (+4.84%)RDDT Reddit, Inc. 229.80 -22.59 (-8.95%)PortfolioSign in to access your portfolioSign inTop gainersFIGR Figure Technology Solutions, Inc. 64.37 +8.55 (+15.32%)FLNC Fluence Energy, Inc. 25.65 +3.00 (+13.25%)GLXY Galaxy Digital 32.21 +4.02 (+14.26%)ERAS Erasca, Inc. 9.45 +1.14 (+13.67%)PEN Penumbra, Inc. 351.00 +37.57 (+11.99%)Top losersRGC Regencell Bioscience Holdings Limited 31.34 -3.83 (-10.89%)RDDT Reddit, Inc. 230.84 -21.54 (-8.53%)BEAM Beam Therapeutics Inc. 32.86 -2.55 (-7.22%)IRON Disc Medicine, Inc. 71.66 -5.42 (-7.03%)USAR USA Rare Earth, Inc. 17.12 -1.16 (-6.35%)Most activeNVDA NVIDIA Corporation 189.19 +6.04 (+3.30%)INTC Intel Corporation 49.13 +0.40 (+0.83%)GRAB Grab Holdings Limited 4.3500 -0.2800 (-6.05%)BBAI BigBear.ai Holdings, Inc. 6.43 +0.17 (+2.72%)ONDS Ondas Holdings Inc. 13.58 +0.01 (+0.11%)Top economic eventsEarnings eventsMy earnings eventsEarnings events