General Market News

Republican Sen. Thom Tillis announced he will block all Trump Federal Reserve nominees, including the new Fed chair, following news that the Justice Department is investigating current Fed Chair Jerome Powell for potential perjury. This creates a significant obstacle to replacing Powell, whose term as chair expires in May, as Tillis sits on the Senate Banking Committee where Republicans hold only a narrow 13-11 majority.

• Tillis's opposition on the 13-11 Republican-majority Banking Committee creates a potential stalemate for confirming any Fed nominees, complicating Trump's plans to appoint a new chair.
• The DOJ investigation is being conducted by U.S. Attorney Jeanine Pirro, a Trump confidant and former Fox News host, raising concerns about Fed independence and politicization of the Justice Department.
• Powell can remain as a Fed governor until 2028 even after his chair term ends in May, though he has not indicated whether he plans to do so.

President Donald Trump proposed capping credit card interest rates, currently averaging 19.65%, which could reduce borrowing costs for some consumers but threatens bank profitability and credit availability. Analysts view the proposal as requiring legislation with slim odds of passage, though financial stocks declined on Monday following the announcement. The move could significantly reshape consumer lending by forcing banks to restrict credit, particularly to subprime borrowers.

• U.S. credit card balances totaled $1.23 trillion as of Q3, with rates averaging 19.65% compared to just 6% for 30-year mortgages, making cards one of banks' most profitable lending businesses
• Analysts warn a rate cap would make credit card lending unprofitable, particularly for subprime borrowers, forcing banks to tighten lending standards and potentially reducing consumer spending and GDP growth
• The cap could push consumers toward less regulated alternatives like buy-now-pay-later services, pawn shops, or loan sharks, increasing financial risks for already-strained borrowers while benefiting non-bank lenders

The Trump administration threatened to indict Federal Reserve Chair Jerome Powell over comments about a building renovation, which Powell called a 'pretext' to influence monetary policy. Powell responded forcefully, denying the charges and defending Fed independence, while Republican Senator Thom Tillis pledged to oppose Trump's Fed nominees until the matter is resolved. Markets showed limited immediate reaction, though the dollar fell and safe-haven assets rose.

• Powell stated the indictment threat is 'not about my testimony last June or about the renovation' but rather 'a consequence of the Federal Reserve setting interest rates based on our best assessment' rather than 'following the preferences of the President'
• Senator Tillis questioned the DOJ's 'independence and credibility' and vowed to oppose all Trump Fed nominees, including Powell's successor, until the legal matter is fully resolved
• Market impact was muted: rates markets priced slightly higher chance of near-term cuts, the dollar fell by the most in three weeks, and gold hit a record high as investors shifted to safe havens

Wall Street futures declined on Monday as the Trump administration threatened to indict Fed Chair Jerome Powell, raising concerns about central bank independence. Financial stocks fell sharply after Trump proposed capping credit card interest rates at 10% for one year starting January 20. The S&P 500 E-minis were down 0.66% while banking and consumer finance stocks tumbled between 2.5% and 11.6%.

• Major banks dropped in premarket trading: Citigroup fell 4%, JPMorgan Chase declined 3%, and Bank of America slipped 2.5%
• Consumer finance firms were hit hardest, with Synchrony Financial, Bread Financial, and Capital One plunging between 10.5% and 11.6% on the proposed 10% credit card interest rate cap
• Fourth-quarter earnings season begins this week with JPMorgan Chase reporting Tuesday, while investors await Tuesday's U.S. consumer price inflation report for signals on Fed policy direction

India's consumer price inflation accelerated to 1.33% in December 2025 from 0.71% in November, driven by higher food prices but still below economist expectations of 1.5%. The record-low inflation has contributed to a slowdown in nominal GDP growth to 8.0% in fiscal year 2026, down from the budgeted 10.1%, raising concerns among policymakers and investors about economic momentum.

• The Reserve Bank of India revised its full-year inflation forecast down to 2% for fiscal year ending March 2026, from 2.6% projected in October
• Nominal GDP growth decelerated to 8.0% in FY2026, significantly below the 10.1% forecast in the Union Budget, with corporate earnings growth slowing to 9-10%
• Analysts expect nominal GDP growth to recover to 10-11% in fiscal year 2027 as inflation is projected to rise to 4.0% by the quarter ending September 2026

President Trump proposed capping credit card interest rates at 10%, down from the current average of 19.65%, but Wall Street analysts believe the plan has slim odds of passing. The proposal would require congressional legislation rather than executive action, and similar measures have historically failed to gain traction. Credit card interest and fees are a major profit source for banks and card issuers.

• Analysts at TD Cowen, Barclays, and Jefferies all assign low probability to the cap passing, noting it requires congressional approval and cannot be implemented via executive order
• The current average U.S. credit card interest rate is 19.65%, and millions of Americans carry monthly balances, with lower-income households disproportionately affected by high rates
• The proposal represents heightened headline risk for card issuers as affordability becomes a central political issue ahead of mid-term elections

U.S. financial stocks dropped in premarket trading on Monday after President Trump called for a one-year cap on credit card interest rates starting January 20. Major banks including JPMorgan Chase, Bank of America, and Citigroup fell 2-4%, while specialized credit card lenders declined 8-10%. Analysts warn the cap could reduce credit access and push borrowers to more expensive alternatives, though implementation may require Congressional legislation.

• Top U.S. banks fell 2.2-3.6% (JPMorgan -3.2%, BofA -2.5%, Citi -3.6%, Wells Fargo -2.2%), while credit card specialists tumbled 8-10% (Synchrony, Bread Financial, Capital One)
• Analysts say the rate cap threatens key bank revenue streams and could force lenders to reduce credit lines or cut access entirely, potentially pushing consumers to payday lenders and pawn shops
• Implementation likely requires Congressional legislation and may exceed presidential authority; timing coincides with major banks reporting Q4 earnings this week starting with JPMorgan on Tuesday

U.S. markets are focused on Tuesday's December CPI report and the start of Q4 earnings season, led by major banks. Inflation is expected to hold at 2.7% year-over-year, which will influence Federal Reserve rate cut expectations for 2026. Major indices extended gains last week, with the S&P 500 up 1.57%, Nasdaq up 1.88%, and Dow up 2.32%.

• CPI data due Tuesday is forecast at 0.3% month-over-month and 2.7% year-over-year, providing crucial insight into whether the Fed will proceed with anticipated rate cuts in 2026.
• Major banks including JPMorgan, Citigroup, Bank of America, Wells Fargo, Goldman Sachs, and Morgan Stanley report Q4 earnings this week, offering first indicators of credit quality and loan demand for 2026.
• U.S. equities remain in intact uptrends with all major indices above their 52-week moving averages; Atlanta Fed's GDPNow model projects strong Q4 growth near 5.1% despite mixed December jobs data showing only 50,000 jobs added.

U.S. stock futures fell sharply and investors fled to safe-haven assets after federal prosecutors launched a criminal investigation into Federal Reserve Chair Jerome Powell regarding his testimony about central bank building renovations. Powell stated the probe is a pretext for President Trump to pressure the Fed to lower rates and undermine its independence. The dollar weakened while long-term Treasury yields rose amid concerns about inflation risks and potential political interference in monetary policy.

• S&P 500 futures dropped 0.7%, Dow futures fell 0.6%, and Nasdaq futures declined 1.1% in premarket trading, while gold and silver surged as safe-haven demand increased
• The dollar fell 0.3% to 98.832 on the DXY index, with the two-year Treasury yield dropping 1.2 basis points to 3.527% while the 10-year yield rose 1.2 basis points to 4.182%
• Markets now await Tuesday's December U.S. inflation data and Wednesday's bank earnings reports, with heightened focus on longer-term inflation risks if the Fed's independence is compromised

U.S. stock futures fell Monday after prosecutors launched a criminal investigation into Federal Reserve Chair Jerome Powell over his testimony regarding central bank renovations. Powell stated the Justice Department issued grand jury subpoenas threatening criminal indictment, calling the probe a pretext for President Trump's pressure campaign to lower interest rates. The news triggered market volatility with the dollar weakening and precious metals rallying sharply.

• Dow futures declined alongside S&P 500 and Nasdaq futures in early Monday trading, while the dollar weakened against major currencies including the euro, pound, and Swiss franc
• Gold and silver futures surged approximately 2% and 6% respectively as investors sought safe-haven assets amid the political uncertainty
• Asian markets showed divergence with Chinese and Japanese stocks rallying over 1%, while mainland Chinese exchanges saw record trading volumes

U.S. stock futures declined Monday after news broke that federal prosecutors launched a criminal investigation into Federal Reserve Chair Jerome Powell over his testimony regarding central bank renovations. Powell characterized the Justice Department probe as politically motivated pressure from President Trump to lower interest rates, as the Fed received grand jury subpoenas threatening criminal indictment.

• Dow, S&P 500, and Nasdaq futures all fell in early trading while the dollar weakened against major currencies including the euro, pound, and Swiss franc
• Safe-haven assets rallied sharply with gold futures rising approximately 2% and silver surging roughly 6% amid the uncertainty
• Powell stated the investigation is a pretext for Trump's campaign to pressure the Fed into cutting rates and potentially remove him from his position

U.S. stock futures declined Monday after prosecutors launched a criminal investigation into Federal Reserve Chair Jerome Powell over his testimony regarding central bank renovations. Powell stated the Justice Department issued grand jury subpoenas and called the probe a pretext for President Trump's campaign to pressure the Fed to lower interest rates.

• Dow futures fell early Monday while the dollar weakened against major currencies including the euro, pound, and Swiss franc
• Gold and silver futures surged approximately 2% and 6% respectively as investors sought safe-haven assets
• Asian markets moved in opposite direction with Chinese and Japanese stock benchmarks rising over 1%

European stock markets are expected to open lower on Monday as investors monitor geopolitical tensions in Iran and increased pressure on the U.S. Federal Reserve. The downturn follows reports that President Trump is considering military options against Iran and the Department of Justice has opened a criminal investigation into Fed Chair Jerome Powell.

• U.K. and German indexes are forecast to open 0.13% lower, with Italy's index down 0.26%, as investors assess potential U.S. military strikes or other actions against Iran following violent crackdowns on protests
• The DOJ has opened a criminal investigation into Fed Chair Jerome Powell related to his Senate testimony, which Powell called an attempt by Trump to influence central bank monetary policy
• Trump aides are reportedly scheduled to brief the president Tuesday on potential military, cyber, and economic measures against Iran, adding to market uncertainty

The Trump administration has threatened to criminally indict Federal Reserve Chair Jerome Powell over testimony about a building renovation project, which Powell called a 'pretext' to pressure the Fed to cut interest rates. The escalation prompted Republican Senator Thom Tillis to pledge opposition to all Trump Fed nominees until the matter is resolved, raising serious concerns about central bank independence.

• The Justice Department issued grand jury subpoenas to the Fed related to Powell's June 2025 testimony about a $2.5 billion headquarters renovation project that the White House criticized as costly
• Powell's term as Fed chair ends in May, but analysts suggest the threatened indictment may increase chances he stays on in defiance; Trump separately faces a Supreme Court case over his attempt to fire Fed Governor Lisa Cook
• Senator Tillis, a member of the Senate Banking Committee, said the threatened indictment puts DOJ's 'independence and credibility' in question and vowed to block all Trump Fed nominees until resolved

US stock futures fell in Asian trading on January 12, 2026, after Fed Chair Powell announced the Department of Justice had opened a criminal investigation into the Federal Reserve. Powell stated the investigation appears to be a response to the Fed setting interest rates based on economic conditions rather than presidential preferences. Despite the selloff, analysts maintain a bullish medium-term outlook supported by earnings optimism, eventual Fed rate cuts, and solid US economic growth.

• Nasdaq 100 E-mini fell 202 points, S&P 500 E-mini dropped 34 points, and Dow Jones E-mini declined 204 points in early Monday trading following Powell's announcement
• USD/JPY climbed to 158.206, its highest level since January 2025, as falling 10-year JGB yields from a 1999 high boosted yen carry trades and cushioned downside risks for US equities
• Markets await December CPI data (forecast to hold at 2.7% annually) and the start of earnings season with JPMorgan Chase reporting January 13, with both expected to influence Fed rate path expectations

U.S. markets declined and the dollar fell after Federal Reserve Chair Jerome Powell revealed the Trump administration threatened him with criminal indictment over Congressional testimony, allegedly as a pretext to pressure the Fed to cut interest rates. The escalating conflict between Trump and Powell has raised investor concerns about central bank independence, causing U.S. equity futures to drop 0.5% and the dollar to weaken 0.2% against major currencies.

• The dollar fell below 158 yen and dropped to $1.1660 per euro as investors reacted to the Fed independence concerns, while S&P 500 futures declined 0.5%
• Fed fund futures priced in about three additional basis points of rate cuts this year, though analysts note the cash rate will ultimately remain what the FOMC majority decides
• Gold surged to a record high above $4,600 an ounce amid the Fed turmoil and escalating unrest in Iran, with Trump threatening intervention

The US attorney's office for the District of Columbia has launched a criminal investigation into Federal Reserve Chair Jerome Powell regarding the Fed's headquarters renovation. The probe examines whether Powell accurately represented the scope and cost of the $2.5 billion project during congressional testimony. The renovation is funded by the Fed itself, not taxpayers, and is expected to be completed in fall 2027.

• The investigation focuses on Powell's June 2025 testimony to the Senate Banking Committee where he denied features like 'new marble,' 'special elevators,' 'water features,' 'beehives,' and 'roof garden terraces'
• The renovation of two Fed office buildings in Washington's Foggy Bottom neighborhood carries an estimated cost of $2.5 billion, funded by the central bank's self-financing operations rather than congressional appropriations
• President Trump has previously threatened legal action over the renovations, with completion expected fall 2027 and employees returning to the building in March 2028

Federal Reserve Chair Jerome Powell stated that the Trump administration threatened him with criminal indictment over Senate testimony from June, with the Department of Justice serving the Fed with grand jury subpoenas on Friday. Powell characterized the action as a 'pretext' to pressure him amid an ongoing dispute with President Trump over interest rate policy.

• The DOJ served the Federal Reserve with grand jury subpoenas on Friday threatening criminal charges related to Powell's testimony before the Senate Banking Committee last June
• Powell publicly stated the legal action is a 'pretext' designed to increase pressure on him in his conflict with Trump over interest rate decisions
• The incident escalates tensions between the White House and the independent Federal Reserve over monetary policy control

Federal prosecutors have launched a criminal investigation into Federal Reserve Chairman Jerome Powell, according to a New York Times report citing officials briefed on the matter. The investigation represents an extraordinary development involving the head of the U.S. central bank, though details about the nature of the probe have not been disclosed.

• The criminal probe was reported by The New York Times based on information from officials familiar with the investigation
• No details have been released regarding the specific allegations or focus of the criminal investigation
• This marks a highly unusual situation involving the chairman of the Federal Reserve, the institution responsible for U.S. monetary policy

Consumer sentiment in the U.S. rose to 54 in January from 52.9 in December, beating economist expectations of 53.5, according to the University of Michigan's Surveys of Consumers. However, the reading remains significantly below the 71.7 level from January 2025, as consumers continue to worry about high prices and softening labor markets. The improvement was driven primarily by lower-income consumers, while sentiment fell among higher-income groups.

• Year-ahead inflation expectations held steady at 4.2%, the lowest since January 2025 but well above that month's 3.3% reading, while long-run inflation expectations rose from 3.2% to 3.4%
• Consumer sentiment remains nearly 25% below last January's reading, with over 90% of consumers focused on 'kitchen table issues' like high prices and weak labor market conditions
• The report comes as the U.S. economy added only 50,000 jobs in December, with total 2025 job growth of just 584,000 - the weakest annual increase outside a recession since 2003