Powell Probed: US Stock Futures Tumble on Criminal Investigation Fears
Overview
Federal Reserve Chair Jerome Powell revealed he is under criminal investigation by the Department of Justice, linking the probe to political pressure from President Trump. The announcement via a video message sent U.S. stock futures sharply lower late Sunday, with Dow futures down nearly 200 points, as markets react to unprecedented uncertainty surrounding central bank independence.
Federal Reserve Chair Jerome Powell announced Sunday that he is under a criminal investigation, a development that sent U.S. stock futures tumbling in late trading. The probe, reportedly overseen by the U.S. Attorney's office for the District of Columbia, stems from grand jury subpoenas served to the Federal Reserve.
Market Reaction
Futures tracking the Dow Jones Industrial Average fell nearly 200 points. The S&P 500 futures saw a decline of approximately 30 points, while Nasdaq futures dropped close to 150 points. This sharp downturn reflects immediate investor anxiety over the unprecedented situation.
Political Pressure Alleged
Powell stated in a video message that the investigation is a consequence of the Fed setting interest rates based on its "best assessment" rather than following political preferences. He specifically cited pressure from President Donald Trump, noting that the Department of Justice served subpoenas related to his testimony before the Senate Banking Committee last June. Powell expressed respect for the rule of law but characterized the action as unprecedented and part of a broader pattern of administrative "threats and ongoing pressure."
Central Bank Independence Concerns
The investigation, reportedly led by U.S. Attorney Jeanine Pirro who was appointed by Trump, amplifies existing concerns about the Federal Reserve's independence. President Trump has previously criticized Powell for being "too slow" to cut interest rates. The Federal Reserve's autonomy is crucial for maintaining economic stability and confidence in monetary policy. With Powell's term set to end in May 2026, interviews for his successor are reportedly underway, with candidates including Kevin Hassett and Kevin Warsh.
