12/01/2026 Daily Reports
- Subpoenas and Indictment Threats: In a rare and somber video address, Fed Chair Jerome Powell revealed that the DOJ served the Fed with grand jury subpoenas. This criminal investigation stems from his testimony regarding the $2.5 billion renovation of the Fed’s headquarters, which critics (including the Trump administration) call a “pretext” for political intimidation.
- Powell Vows to Stand Firm: Powell explicitly stated that the threat of criminal charges is a consequence of the Fed refusing to “follow the preferences of the President” on interest rate policy. He has pledged to serve until his term as Chair expires in May 2026.
- Dollar and Bonds Under Fire: The USD has sold off as markets price in “independence risk.” While the DXY is down roughly 0.3%, the real story is in the bond market—watch for a sharp steepening of the yield curve if investors lose faith in the Fed’s ability to fight inflation without interference.
- The “Greenland” Frontier Risk: Tensions are boiling in Europe as the White House refuses to rule out military force to acquire Greenland. Danish pension funds have already begun assessing a potential sell-off of US Treasuries as a defensive measure, citing a breakdown in the “rules-based order.”
- Safe Havens Rising: The Swiss Franc has emerged as the big winner today, acting as the primary hedge against US political instability. Meanwhile, the Japanese Yen remains weak at 157.9, as domestic snap-election rumors keep investors away.
- CPI & SCOTUS Watch: Before the Fed news broke, the market was bracing for tomorrow’s US Core CPI (expected at a “hot” 0.4% MoM) and the looming Supreme Court ruling on tariffs. These are now secondary to the constitutional crisis at the Fed.
What’s Next?:
- We are officially in “uncharted waters.” For decades, the independence of the Federal Reserve was the “bedrock” of the global financial system. By weaponizing the DOJ over a construction project to pressure rate decisions, the administration has introduced a “sovereign risk premium” into the US Dollar that we usually only see in emerging markets.
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- Fed Independence Crisis: Global markets faced instability after Fed Chair Powell revealed DOJ subpoenas regarding the Fed’s $2.5B HQ renovation. Powell labeled the probe a “pretext” for political retaliation by the Trump administration over the Fed’s refusal to aggressively cut interest rates.
- Geopolitical Flashpoints: “Safe-haven” demand spiked as US foreign policy became increasingly aggressive. Tensions escalated with Europe over US plans to acquire Greenland, threatening NATO stability. Simultaneously, markets are digesting the US intervention in Venezuela (following Maduro’s capture) and potential military options regarding Iran’s ongoing protests.
- Equities & Central Banks:
- US: Nasdaq 100 futures dipped ~0.6% as investors paused ahead of bank earnings and CPI data.
- Global: The German DAX held near record highs (~25,300), buoyed by defense stocks, while Japan’s Nikkei was closed for a holiday.
- Policy: A divergence is emerging for 2026: The Fed and ECB are expected to hold rates, while the Bank of Japan plans further hikes.
- Commodities:
- Gold: Spot gold surged to a record high, driven by the intense political and geopolitical risk.
- Energy: Despite current tensions, Goldman Sachs forecasts Brent crude to average lower (mid-$60s) in 2026 due to supply surpluses. Natural gas futures ticked modestly higher ($3.23+).
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Risk sentiment in global markets has deteriorated noticeably, prompting investors to seek safe-haven assets. The U.S. Justice Department’s move to raise the possibility of a criminal investigation into the Federal Reserve has reignited concerns over the central bank’s independence, placing renewed pressure on the U.S. dollar. This development has driven sharp gains in precious metals.
Gold prices climbed to a record high of around $4,600 per ounce, while silver approached its all-time peak. Federal Reserve Chair Jerome Powell’s remarks—framing the threat as part of the administration’s broader and ongoing pressure on monetary policy decisions—have further reinforced perceptions of institutional risk. The Trump administration’s repeated attacks on the Fed in the past have been among the key factors undermining confidence in the dollar’s status as a reserve currency.
On the geopolitical front, escalating and deadly protests in Iran are deepening uncertainty across the Middle East. Questions surrounding the political future of the Islamic Republic have strengthened demand for safe-haven assets. When combined with U.S. President Donald Trump’s comments that “all options are on the table” regarding Iran—alongside renewed threats concerning Greenland and criticism of the NATO alliance—the overall picture points to a rising global geopolitical risk premium.
Overall, the combination of institutional concerns in the United States and heightened geopolitical tensions suggests that precious metals may continue to exhibit strength in the near term.
