Mon 12 Jan: After the Bell🔒
Fed Tensions and Geopolitics Set the Tone as Gold and Silver Hit Records. Your 5’ evening market wrap📄📈
ℹ️ Today’s performance tables & charts on the ‘Market Data’ post.
Good evening,
Today’s main driver of sentiment was Trump’s confrontation with Jerome Powell. The Fed Chair publicly accused the Trump administration of using the threat of criminal prosecution to pressure the central bank into cutting interest rates, marking an unprecedented escalation in tensions. Prosecutors are investigating Powell in connection with his testimony last summer regarding the Fed’s renovation project. In a rare and unusually direct video statement, Powell framed the Justice Department probe as a direct challenge to the Fed’s independence from political control.
A group of former Federal Reserve chairs, Treasury secretaries, and leading economists voiced support for Powell today, warning that the Justice Department’s threat of criminal prosecution poses serious risks to the central bank. The clash has renewed concerns over its independence and, more broadly, the resilience of US institutional governance.
Markets opened the week on a cautious footing as investors digested Powell’s message, alongside renewed geopolitical uncertainty following weekend tensions involving Iran. Equities initially sold off but recovered into the close, and the S&P 500 closed at a new record, while the clearest price action was in commodities: gold rose 2%, and silver surged 7% to fresh record highs, lifting the entire precious metals complex. The DXY $ index edged lower, partially unwinding last week’s gains, as core rates were little changed ahead of tomorrow’s key US inflation print, with 10-year Treasuries at 4.19%. Meanwhile, oil extended its recovery for a third consecutive session, with WTI approaching $60 and trading at a one-month high.
