Reviewed by Gotrade Internal Analyst
Jakarta, Gotrade News - President Donald Trump is officially turning up the heat on the Federal Reserve by ordering a criminal investigation. This move signals a major showdown to grab the steering wheel of US interest rate policy.
Key Takeaways:
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Justice Department sends subpoenas over the 2.5 billion dollar renovation project.
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Trump targets "gross incompetence" as a legal loophole to fire Fed officials.
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This drama puts the Fed’s inflation-fighting street cred at serious risk.
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The legal saga kicked off with subpoenas targeting the Fed's leadership regarding their massive building budget. According to a report from AP News, investigators are digging into a 600 million dollar cost overrun.
Trump is effectively using this investigation as a strategic play to pressure the central bank’s independence. This move could give him the leverage needed to oust Fed officials for alleged misconduct.
Legally, the President can only fire the Fed Chair for specific causes or clear-cut failures. This construction audit serves as a backdoor to meet those legal requirements for dismissal.
This public beef has left investors worried about the Fed's ability to keep inflation in check. Markets might start demanding higher yields for US Treasury bonds to compensate for the added risk.
Tech giants like Apple Inc. are in the line of fire due to their sensitivity to rate hikes. Their borrowing costs could spike if the Fed's policy becomes unpredictable or politically driven.
Wall Street heavyweights like The Goldman Sachs Group, Inc. are also keeping a close watch on institutional stability. A politically charged leadership shake-up could totally disrupt the global market vibes.
Trump is already eyeing potential replacements to take over the Fed throne very soon. These nominations are expected to drop right as Jerome Powell's term enters the final stretch.
Read also: Meta Taps Former Trump Advisor as President
Investors should stay sharp and watch for any solid evidence coming out of the Justice Department. This legal endgame will ultimately decide the next big move for US stocks.
Reference:
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AP News, Bringing charges against the Fed: What we do (and don’t) know. Accessed on January 13, 2026
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