The war of words between Donald Trump and the Federal Reserve escalated in dramatic fashion to start the week, as the US Justice Department served grand jury subpoenas and threatened to indict chair Jerome Powell. All this was supposedly over the Fed’s recent building work, although the president did let slip that the decision to launch criminal inquests came as a consequence of Powell’s watchful approach to interest rates.
Safe-haven metals gold and silver reached towards fresh records on Monday. Meanwhile, the US dollar sank by more than half a cent against both the pound and the euro.
A group of former Fed chairs, including Janet Yellen, Ben Bernanke and Alan Greenspan, issued a sharply worded rebuke of the proceedings against Powell yesterday evening. In a joint statement, the group likened the Trump administration’s actions to those of an emerging market and argued they had “no place in the United States, whose greatest strength is the rule of law, which is at the foundation of our economic success.”
It’s been a wild start to 2026. You can find plenty more analysis of the dizzying geopolitical picture, and fragile economic recovery, and the key events set to dominate the next few months in our latest Quarterly Forecast. You’ll be able to access your copy when our emails hit your inbox later this morning.
The row between the UK government and X (formerly Twitter) over indecent AI-generated materials rumbled on. Media regulator Ofcom opened an investigation into its content, a move Elon Musk decried as “censorship”. The UK government later unveiled plans to ban explicit content created without consent.
As if there wasn’t enough going on right now, we’re entering “earnings season” and a host of major companies are set to report on their performance. Banks are expected to confirm the best year for their investment banking divisions since the pandemic, while Alphabet became the fourth tech firm to hit a $4 trillion market valuation.
Today’s main event will be this afternoon’s US inflation report, but keep an eye out as well for any further movement in the Jerome Powell saga, as well as news concerning Greenland and Venezuela.
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