US stocks slide, gold surges after DOJ opens criminal probe into Fed

US stocks slide, gold surges after DOJ opens criminal probe into Fed

Wall Street was rocked early Monday after federal prosecutors opened a criminal investigation into Federal Reserve Chair Jerome Powell — rattling traders and igniting fears of political interference at the central financial institution.

Dow futures tumbled more than 350 factors in premarket buying and selling, with the blue-chip contract down 357 factors, or 0.72%, while S&P 500 futures slid 39.75 factors, or 0.57%, and Nasdaq futures sank 201.25 factors, or 0.78%, as traders reacted to the Justice Department’s transfer against the Fed chair.

Meanwhile, gold surged to file territory as traders piled into protected havens, with spot costs leaping about 2% to round $4,595 an oz after briefly touching $4,600, while US gold futures for February supply climbed more than 2% to roughly $4,606.

The US Attorney’s Office for the District of Columbia has opened a criminal probe into Powell over his June 2025 testimony to Congress about the scope and price of the Federal Reserve’s $2.5 billion renovation of its Washington, DC headquarters, officers conversant in the matter told the New York Times.

Stock futures fell early Monday morning on Wall Street after it was realized that the Justice Department had opened a criminal investigation against Fed Chair Jerome Powell. through REUTERS

Last April, The Post was first to report that the Fed was shifting ahead with intensive renovations as a part of a $2.5 billion overhaul of the Marriner S. Eccles Federal Reserve Board Building on the nook of twentieth St. and Constitution Ave. — despite being more than $700 million over price range.

The newly announced probe was permitted in November by Jeanine Pirro, the Trump ally tapped to run the US legal professional’s workplace last yr, and features a review of Powell’s public statements and an examination of the Fed’s inside spending data, according to officers briefed on the investigation.

Powell confirmed late Sunday that the Justice Department had served the Fed with grand jury subpoenas and warned that prosecutors have been threatening a criminal indictment tied to his testimony, calling the transfer an unprecedented assault on the central financial institution.

He said the investigation was politically motivated retaliation for the Fed’s refusal to bow to White House stress to slash rates of interest, arguing the menace of prosecution was meant to intimidate policymakers into aligning financial choices with President Trump’s calls for.

President Trump and Powell have been at odds over rate of interest cuts. AP

Powell accused President Trump of utilizing the investigation as an intimidation tactic. AFP through Getty Images

“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President,” Powell said in an announcement reacting to the investigation on Sunday.

“I have served at the Federal Reserve under four administrations, Republicans and Democrats alike,” the central financial institution chief added.

“In every case, I have carried out my duties without political fear or favor, focused solely on our mandate of price stability and maximum employment.”

The Post has sought remark from the White House and the Justice Department.

Powell, a former private-equity govt and Washington lawyer, was first nominated to steer the Federal Reserve by Trump in 2017 and confirmed by the Senate the following yr, inheriting an establishment designed to function independently from the White House.

While his time period as chair expires in May 2026, his seat as a Fed governor runs by way of January 2028, permitting him to stay at the central financial institution until eliminated for trigger.

Dow futures tumbled more than 340 factors in premarket buying and selling, with the blue-chip contract down 342 factors, or 0.69%.

Nasdaq futures sank 201.25 factors, or 0.78%, as traders reacted to the Justice Department’s transfer against the Fed chair.

S&P 500 futures slid 39 factors, or 0.56%.

Since returning to workplace, Trump has repeatedly clashed with Powell over rates of interest, publicly accusing him of incompetence and threatening to fireplace him for refusing to slash borrowing prices despite inflation falling below 3%.

Trump has said he already has a substitute in thoughts and has floated authorized action tied to the Fed’s headquarters renovation as a part of his broader stress campaign.

The $2.5 billion project broke floor in 2022 and is funded totally by the Fed by way of curiosity earnings and charges, not congressional appropriations or taxpayer {dollars}.

Planning paperwork from 2021 included options such as personal eating rooms, particular elevators, water options, marble upgrades and a rooftop terrace, though Powell later told lawmakers many of those parts have been scrapped as plans advanced.

The Fed has said value overruns — now estimated at roughly $700 million — stem from inflation, labor and supplies prices, asbestos and lead elimination, soil contamination and upgrades required to fulfill fashionable security and accessibility requirements.

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