US stocks slide, gold surges after DOJ opens – Business News
Wall Street was rocked early Monday after federal prosecutors opened a felony investigation into Federal Reserve Chair Jerome Powell — rattling buyers and igniting fears of political interference on the central bank.
Dow futures tumbled more than 350 factors in premarket trading, with the blue-chip contract down 357 factors, or 0.72%, whereas S&P 500 futures slid 39.75 factors, or 0.57%, and Nasdaq futures sank 201.25 factors, or 0.78%, as buyers reacted to the Justice Department’s transfer towards the Fed chair.
Meanwhile, gold surged to report territory as buyers piled into secure havens, with spot costs leaping about 2% to round $4,595 an ounce after briefly touching $4,600, whereas 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 felony probe into Powell over his June 2025 testimony to Congress in regards to the scope and value of the Federal Reserve’s $2.5 billion renovation of its Washington, DC headquarters, officers accustomed to the matter advised the New York Times.
Stock futures fell early Monday morning on Wall Street after it was realized that the Justice Department had opened a felony investigation towards Fed Chair Jerome Powell. by way of REUTERS
Last April, The Post was first to report that the Fed was shifting ahead with intensive renovations as half of a $2.5 billion overhaul of the Marriner S. Eccles Federal Reserve Board Building on the nook of twentieth St. and Constitution Ave. — regardless of being more than $700 million over finances.
The newly introduced probe was accepted in November by Jeanine Pirro, the Trump ally tapped to run the US lawyer’s workplace final yr, and contains a review of Powell’s public statements and an examination of the Fed’s inside spending information, in line with 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 felony indictment tied to his testimony, calling the transfer an unprecedented assault on the central bank.
He mentioned the investigation was politically motivated retaliation for the Fed’s refusal to bow to White House strain to slash rates of interest, arguing the risk of prosecution was meant to intimidate policymakers into aligning financial selections 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 by way of 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 mentioned in a assertion reacting to the investigation on Sunday.
“I have served at the Federal Reserve under four administrations, Republicans and Democrats alike,” the central bank 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 next yr, inheriting an establishment designed to operate 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 on the central bank until eliminated for trigger.
Dow futures tumbled more than 340 factors in premarket trading, with the blue-chip contract down 342 factors, or 0.69%.
Nasdaq futures sank 201.25 factors, or 0.78%, as buyers reacted to the Justice Department’s transfer towards 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 fire him for refusing to slash borrowing prices regardless of inflation falling under 3%.
Trump has mentioned he already has a alternative in thoughts and has floated legal motion tied to the Fed’s headquarters renovation as half of his broader strain marketing campaign.
The $2.5 billion project broke ground in 2022 and is funded fully by the Fed by way of curiosity income and charges, not congressional appropriations or taxpayer {dollars}.
Planning paperwork from 2021 included options resembling non-public eating rooms, particular elevators, water options, marble upgrades and a rooftop terrace, although Powell later advised lawmakers many of these components have been scrapped as plans developed.
The Fed has mentioned price overruns — now estimated at roughly $700 million — stem from inflation, labor and supplies prices, asbestos and lead removing, soil contamination and upgrades required to satisfy trendy security and accessibility requirements.
