FX markets

Daily Market View 12-01-2026

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1:43

Dollar Plummets as Fed gets Subpoenas from DoJ

1 Minute Market Rundown

Fed Chairman Jerome Powell announced last night that he and other Federal Reserve officials have been called to testify on funding for federal buildings.
Powell placed the blame on President Trump, stating that the move was politically motivated by the administration.
The U.S. dollar opened weaker, posting its largest decline in nearly three weeks.

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Trump simply cannot leave the Fed alone, with Chairman Powell and various other members being called to testify in new charges of lying to Congress regarding the amount spent on new buildings for the Fed completed recently.

Naturally, its difficult to see this as more than a political play to punish Powell and possibly threaten the next Fed Governor into following the President's orders. The market certainly seems to have taken it as such, with the Dollar reacting very poorly to the move, with the broader Dollar index 0.31% down this morning.

Screenshot 2026-01-09 080355

Given how long these kinds of investigations generally take and the fact that US CPI releases tomorrow, how long these subpoenas will be first in the markets mind is difficult to say. They further shake confidence that the Fed can maintain its independence in a Trump world, but with the US seemingly poised to strike Iran and CPI tomorrow, perhaps it will only occupy top spot in terms of market thought for a short period.

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