Bloomberg Surveillance Powell Vows to Stand Firm as Fed Served With DOJ Subpoenas
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Jan 12, 2026 Thierry Wizman, a seasoned FX and rates strategist at Macquarie Group, brings his expertise to discuss the recent DOJ subpoenas directed at the Federal Reserve. He emphasizes the potential impacts on market reactions and Powell's future on the Fed board. Alicia Levine, the Head of Investment Strategy at BNY Wealth, offers insights into the resilience of equities, highlighting sector leadership beyond the major tech players. They dive into labor dynamics, economic snapshots, and navigate the complexities of tariffs and inflation, painting a comprehensive market outlook.
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Why Fed Independence Still Matters
- Fed independence matters because the White House and the Fed have different reaction functions on growth versus inflation.
- Thierry Wizman argues keeping policy insulated prevents short-term political pressure from fueling inflationary bias.
Subpoenas Felt Incremental To Markets
- Markets were already acclimating to pressure on Jay Powell so the DOJ subpoenas were incremental, not transformational.
- Wizman says bond yields rose mainly because markets expect a more inflationary structural tilt, not an unexpected shock.
Growth With Weak Job Formation
- The economy shows mixed signals: strong productivity and growth despite weaker job creation.
- Wizman highlights a K-shaped dynamic where high-income households drive consumption while low-income weakness poses a downside risk.
