The End Game of the Powell Era Has Begun

While the geopolitical risks are troubling in the short term, investors remain bullish on stocks and expectations for economic growth & strong earnings in 2026.

WASHINGTON, DC - JULY 24: U.S. President Donald Trump and Federal Reserve Chair Jerome Powell tour the Federal Reserve’s $2.5 billion headquarters renovation project on July 24, 2025 in Washington, DC. The Trump administration has been critical of the cost of the renovation and Federal Reserve Chairman Jerome Powell. Photo by Chip Somodevilla/Getty Images

Commentary

Fed Chairman Jerome Powell told the press that the Fed has received a grand jury subpoena, which could lead to a criminal indictment. The DOJ investigation is about cost overruns at the $2.5 billion construction project for a new Fed headquarters. Obviously, if Fed Chairman Powell is being investigated by the DOJ, it may be harder for him to do his job (his term expires in May), so the real question is whether the DOJ investigation is intended to oust Chairman Powell. This potential threat to the Fed’s independence has rattled the currency markets, as the U.S. dollar sold off in the wake of the DOJ investigation news.