January 13, 2026
Over the weekend, tensions between the White House and Federal Reserve escalated significantly. The Fed received grand jury subpoenas from the Department of Justice. They were nominally related to Powell’s testimony to Congress about a Fed building project. Fed Chairman Jerome Powell released a blunt statement in reply, saying that the investigation was pretext and its true purpose was to pressure the central bank over rates. President Trump has made clear his desire for lower rates, arguing that higher rates needlessly add to the country’s debt-servicing burden.
The market reacted by bringing the US dollar “debasement trade” back in full force: Gold rose 2%, silver gained 7%, and the yield on 30-year Treasuries was up five basis points. This latest instance of Fed-related news-making comes as President Trump is preparing to announce his nominee to replace Powell. Powell’s term ends in May, and historical nominations typically come around four months prior to exit. Polymarket continues to see a close race between the “Kevins,” referring to the Director of the National Economic Council Kevin Hassett and former Fed Governor Kevin Warsh. The Supreme Court will also hear arguments over Trump’s effort to remove Governor Lisa Cook on January 21st.
Key Takeaway: Countries with high government debt like the US can begin to lose inflation credibility in the eyes of market participants because the burden of rising interest expense may kindle desires to keep interest rates artificially low. As a store of value, digital assets like Bitcoin and Ether can prove to be a strong diversifier in these types of environments.
Metal Prices Have Spiked on Dollar Debasement Jitters
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