US Stock Futures Slide, Dollar Weakens Amid Threats to Fed Independence

U.S. equity futures moved lower and the dollar softened as investors grew uneasy about the Federal Reserve’s independence, following remarks from Chair Jerome Powell that suggested legal threats were tied to the central bank’s policy decisions.

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Futures linked to the S&P 500 slid as much as 0.7% after Powell disclosed that the Fed had received grand jury subpoenas from the Justice Department related to ongoing renovation work at its Washington headquarters.

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The news sparked a rush into traditional safe havens. Gold surged as much as 2% to a fresh all-time high, while the Swiss franc climbed roughly 0.5%, reflecting heightened demand for assets perceived as more stable during periods of political and market stress.

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“The investigation involving Powell doesn’t reflect well on the Fed, the broader U.S. government, or financial markets overall,” said Nick Twidale, chief market analyst at AT Global Markets in Sydney. He added that Powell’s tone suggested a willingness to confront the president directly, underscoring how elevated tensions have become.

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The possibility of a criminal indictment from the Trump administration represents a sharp escalation in the president’s long-running dispute with the Federal Reserve over interest-rate policy. Trump has repeatedly argued for deeper and faster rate cuts, while also floating the idea of removing Powell from his post. The standoff has raised concerns among investors about political interference in monetary policy at a time when markets are highly sensitive to shifts in rates and inflation expectations.

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In a statement released Sunday evening, Powell framed the issue as a fundamental test of the Fed’s autonomy. He warned that the central bank’s ability to set policy based on data and economic conditions could be undermined if political pressure or intimidation were allowed to influence decision-making.

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For now, Fed officials have emphasized patience. Policymakers have indicated they want to see additional economic evidence before committing to further rate reductions, following a third straight quarter-point cut delivered last month.

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That cautious stance was reinforced after the latest U.S. employment report released Friday. In response to the data, economists at Morgan Stanley, Barclays, and Citigroup all pushed back their expectations for additional easing, now projecting that further cuts are more likely later in 2026 rather than sooner.

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Currency markets reflected the shifting mood. dollar index slipped as much as 0.2% before paring some of those losses. The greenback weakened against nearly all of its Group-of-10 counterparts, with the yen being the notable exception.

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In bond markets, U.S. Treasuries came under pressure when European trading began, after Asian markets were closed for a holiday in Japan. The benchmark 10-year Treasury yield rose by about two basis points to 4.19%, signaling modest selling as investors weighed political risks against the outlook for interest rates.

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Precious metals extended their rally amid the uncertainty. Both gold and silver pushed to record levels, buoyed by concerns over the Justice Department’s stance toward the Fed and by rising geopolitical tensions.

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Protests in Iran added to the appeal of safe-haven assets. Gold prices surged toward $4,600 an ounce, while silver climbed close to $85, highlighting the strength of demand for hard assets during periods of instability.

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Energy markets also remained in focus. Oil prices held onto their largest two-day advance since October, driven by fears that escalating unrest in Iran could threaten supply from OPEC’s fourth-largest producer. Brent crude traded above $63 a barrel after rising nearly 6% over Thursday and Friday combined, while West Texas Intermediate hovered near $59.

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President Trump said the U.S. is closely monitoring developments in Iran and is considering potential responses as the country enters its third consecutive week of nationwide protests the most significant unrest since 2022. Any disruption to Iranian output could have meaningful implications for global energy markets, particularly if tensions spill over into the broader region.

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In other political developments, the U.S. Supreme Court declined on Friday to take up challenges related to Trump’s tariffs. The court’s next scheduled day for issuing opinions is Wednesday, leaving uncertainty around trade policy unresolved for now.

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Looking ahead, global policymakers and central bankers remain active. Finance ministers from the Group of Seven are meeting in Washington on Monday to discuss issues related to rare earth materials, a topic with growing strategic and economic importance. Meanwhile, New York Fed President John Williams and Atlanta Fed President Raphael Bostic are both scheduled to deliver public remarks, which investors will parse closely for clues about the future direction of U.S. monetary policy.

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