🚨 MARKET WATCH: Powell Legal Pressure Is a Risk Markets Are Ignoring
🔥 ALERT: This isn’t noise, it’s structural risk.
Reports say the DOJ has issued grand jury subpoenas tied to the Federal Reserve, putting Chair Jerome Powell under serious legal scrutiny. At the same time, the Supreme Court is set to hear a case for the first time in over a century that could decide whether a U.S. President has the power to remove Fed governors. That goes straight to the heart of central bank independence.
Here’s the disconnect: nearly $4 trillion in rate-sensitive positions are betting on future rate cuts, yet markets are barely pricing in the possibility that Fed independence itself could be challenged. Bond volatility, measured by the MOVE index, is sitting near multi-year lows, signaling complacency, not safety.
History tells a different story.
When central bank credibility cracks, inflation and instability tend to follow. Turkey is a recent example, where rates surged from around 10% to over 80% in less than two years once political pressure took over monetary policy.
With Powell’s term ending in May 2026, the real risk is not just who leads the Fed next, but whether markets can still trust the institution. Right now, that credibility risk looks severely underpriced.
Calm on the surface. Pressure underneath.
This is where danger and opportunity start to overlap
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