Morning Market Brief | Jan 13, 2026 | Trump vs. Fed: Powell Slams DOJ Probe as "Political Pretext"

The Federal Reserve vs. The White House
• DOJ Subpoenas: The Department of Justice (DOJ) served the Federal Reserve with grand jury subpoenas in a criminal investigation related to Chair Jerome Powell’s testimony regarding the Fed’s building renovations.
• Powell’s Defense: In an unprecedented video message, Powell stated the investigation is a "pretext" to undermine Fed independence and influence interest rates. He vowed to serve out his full term as Governor through 2028.
• Congressional Backlash: Republican Senator Thom Tillis announced he will block any new Fed nominees until the legal matter is resolved. Senator Lisa Murkowski supported this move, and Representative French Hill called the probe an "unnecessary distraction".
• Institutional Reaction: Former Fed and Treasury officials issued a joint statement calling the DOJ's action a "foundational attack" on central bank independence.
Economic Populism & Affordability
• Credit Card Interest Cap: President Trump called for a 12-month, 10% cap on credit card interest rates (down from the 25–30% average). He warned banks they would be "violating the law" if rates aren't lowered by January 20, though no such legislation currently exists.
• Bank Reactions: Shares of Capital One, American Express, and JP Morgan fell significantly on the news. Analysts warned that such a cap could force banks to stop lending to high-risk or low-income borrowers.
• Housing Initiatives: The administration is targeting institutional investors, with plans to ban them from purchasing single-family homes. Meanwhile, the FHFA confirmed a $200 billion mortgage-backed security buy to lower interest rates.
Geopolitical Tensions
• Iran Unrest: Massive anti-government protests in Iran have resulted in over 540 deaths and 10,000 arrests. Trump threatened a 25% tariff on any country trading with Iran and is considering military options or deploying Elon Musk’s Starlink to assist protesters.
• Venezuelan Oil: Trump is pressuring U.S. oil companies to rebuild Venezuela's industry. After Exxon CEO Darren Woods called Venezuela "uninvestable" due to past asset seizures, Trump threatened to exclude Exxon from future deals.
• Greenland Interest: Trump reiterated that the U.S. will acquire Greenland "one way or the other" to prevent Russian or Chinese influence, prompting European allies (UK, Germany) to discuss increasing their own Arctic military presence.
Corporate & Technological News
• Walmart’s Tech Pivot: Walmart is joining the Nasdaq 100 and has partnered with Alphabet to integrate Google’s Gemini AI into its shopping assistant.
• AI Alliances: Apple reportedly struck a deal with Alphabet to use Gemini to power AI features in Siri. NVIDIA and Eli Lilly announced a $1 billion investment over five years to build a new AI drug discovery lab.
• Meta Updates: Meta hired former Trump advisor Dena Powell McCormick as Vice Chair. Simultaneously, reports surfaced of a 10% staff cut in its Reality Labs division as the company prioritizes AI infrastructure.
• Media Hostility: Paramount is escalating its bid for Warner Bros. Discovery, launching a proxy battle to replace the board and suing for greater disclosure for shareholders.
Markets & Crypto
• Market Records: Despite the political "noise," the S&P 500 and Dow Jones reached new record highs.
• Precious Metals: Gold and silver reached record highs as investors sought safety amid concerns over the Fed and dollar stability.
• Cryptocurrency: Bitcoin climbed to $92,000. Senator Elizabeth Warren warned the SEC of risks associated with including "volatile" crypto in 401(k) retirement accounts. Crypto custody firm BitGo filed for a $200 million IPO.
Other News
• Minneapolis Incident: Hundreds of federal agents were deployed to Minneapolis following a fatal shooting of a woman by an ICE agent, sparking national debate over deadly force.
• Obituary: Bob Weir, founding member of the Grateful Dead, died at age 78.