The Department of Justice opened a criminal investigation on Sunday into Jerome Powell, the sitting U.S. Federal Reserve chair, over allegations he misled Congress about a headquarters renovation project, a probe Powell dismissed as “a pretext.”
The probe is overseen by U.S. Attorney Jeanine Pirro, a Trump appointee, and it prompted political backlash.
Senator Thom Tillis condemned the move and vowed to block Fed nominations until the matter is resolved, saying “It is now the independence and credibility of the Department of Justice that are in question.”
Safe-haven metals rose immediately, with gold and silver jumping about 2% and 5% respectively, while Bitcoin climbed roughly 1.7% to $92,000, according to CoinGecko data.
Market observers warned of greater uncertainty.
Jimmy Xue said, “The legal proceedings have added a new layer of uncertainty to the macro front,” and added that the episode reinforces Bitcoin’s narrative as a “neutral” asset that may attract institutional capital.
Analysts also cautioned about precedent and volatility.
Tim Sun said, “The President could use executive authority and the judicial system to punish a central bank chair for failing to comply with his preferred monetary stance.”
He added that after repricing, “Bitcoin could gradually evolve, at the narrative level, into an institutional hedge.”
Observers noted the development could complicate Fed leadership and policy timing, with commentary suggesting a possible leadership vacuum; see Quinn Thompson’s tweet and the Kobeissi Letter’s tweet.
