- Powell says DOJ scrutiny threatens Fed independence amid rate disputes.
- CPI and PPI data this week could reshape rate-cut expectations.
- Bitcoin sits at a technical crossroads as macro risks converge.
Federal Reserve Chair Jerome Powell is pushing back against what he calls an “unprecedented” challenge to the central bank’s independence, as a Justice Department probe unfolds just months before his term expires. The timing could hardly be more sensitive. Markets are heading into a pivotal week packed with inflation data, labor figures, and a potential Supreme Court ruling that could reshape expectations for interest rates — and Bitcoin.
Powell Links DOJ Subpoenas to Rate Policy Dispute
In a recent public address, Powell revealed that the Department of Justice issued grand jury subpoenas to the Federal Reserve, tied to testimony he gave last year regarding a $2.5 billion renovation of the Fed’s Washington headquarters. He said the move included the possibility of criminal charges — a development he described as without precedent.
Powell argued that the allegations are being used as leverage amid mounting political pressure over monetary policy. According to the Fed chair, Congress was kept informed throughout the renovation process via public disclosures and testimony.
More broadly, Powell framed the probe as a challenge to the Fed’s ability to set interest rates based on economic data rather than political demands. Since late 2025, the Fed has cut rates three times, bringing the benchmark range to 3.50%–3.75%, while also ending quantitative tightening in December.
Trump Pushes Back as Succession Talk Intensifies
President Donald Trump, who has repeatedly criticized Powell for not cutting rates aggressively enough, denied any involvement in the DOJ investigation. In a weekend interview, Trump said he was unaware of the probe and dismissed any link between the subpoenas and interest-rate policy.
Still, the political backdrop is hard to ignore. Powell’s term ends in May 2026, and Trump has already narrowed a shortlist of potential successors reportedly more aligned with his preference for sharply lower rates. Names circulating include Kevin Hassett, Kevin Warsh, Christopher Waller, and Rick Rieder, with Hassett widely viewed as a front-runner.
A Critical Macro Week for Bitcoin and Risk Assets
Against this backdrop, investors are bracing for a dense stretch of U.S. economic releases between January 12 and 17 — a window that could drive sharp moves across markets.
Tuesday’s Consumer Price Index is the headline event. Forecasts suggest inflation continued cooling in December, a scenario that would strengthen expectations for rate cuts later in 2026. That outcome would likely weaken the dollar and support risk assets, including Bitcoin, which has been hovering near the $92,000 level.
Producer Price Index data follows on Wednesday, offering an early signal on pipeline inflation. If it confirms disinflation trends, it could extend any post-CPI rally. The same day, the Supreme Court may issue a ruling on Trump-era tariffs — a decision that could either ease inflation pressures or reignite trade concerns.
Thursday’s initial jobless claims will round out the week, providing insight into labor market momentum and the Fed’s policy runway.
Also Read: Did Venezuela Secretly Hoard 600,000 Bitcoin? Analysts Say the Math Doesn’t Add Up
Powell’s warning about political interference arrives just as markets are recalibrating expectations for rates, inflation, and liquidity. With Bitcoin historically sensitive to shifts in monetary policy and macro risk, the convergence of legal drama, economic data, and political transition makes this week a defining one for both traditional and digital markets.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of CoinBrief.io. Before making any investment decisions, you should always conduct your own research. CoinBrief.io is not responsible for any financial losses.
