WSJ What’s News U.S. Prosecutors Investigate Fed Chair Powell
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Jan 12, 2026 Finance editor Alex Frangos discusses the Justice Department's investigation into Federal Reserve Chair Jerome Powell, viewing it as a serious challenge to the Fed’s independence. He analyzes market reactions, including a dip in the dollar and surge in gold prices. Frangos also explores how the probe could affect potential successors and future political dynamics within the Fed. Additionally, the podcast touches on President Trump's comments about intervening in Iran and his push for capping credit card interest rates, revealing broader economic concerns and strategies.
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Investigation Seen As Threat To Fed Independence
- The Justice Department's probe into Jerome Powell is being framed as a political attack on Fed independence.
- Markets reacted negatively with a weaker dollar, record gold, rising long-term yields, and lower stock futures.
Markets Price In Long-Term Policy Risk
- Alex Frangos says market moves show investors worry about long-term policy uncertainty, not just the immediate term.
- He notes Powell's pending May departure complicates signals for future Fed leadership and rate-setting.
Successor Stakes Raise Independence Concerns
- The probe raises questions about who will lead the Fed after Powell and whether successors will feel free to act independently.
- Potential nominees like Kevin Hassett or Kevin Warsh may hesitate if independence appears unsafe.