Lawmakers, Central Bank Officials Back Powell as Trump Allies Fear Blowback From Probe

Lawmakers, Central Bank Officials Back Powell as Trump Allies Fear Blowback From Probe By Vicky Ge Huang

Some Trump administration officials and allies have expressed concern that the Justice Department's criminal investigation into Federal Reserve Chair Jerome Powell could imperil the president's nominees in the Senate and rattle financial markets. Senate Republicans criticized the investigation, defending the central bank's autonomy against what some GOP lawmakers called an overtly political probe by the Trump administration. Meanwhile, Powell has found an unlikely army standing behind him: the meme-stock crowd.

Top News Trump Allies and Officials Fear Blowback From Powell Probe

Among those alarmed about potential fallout

from a probe into Jerome Powell was Treasury Secretary Scott Bessent, who called Trump Sunday night and told him that the investigation could cause several issues for the administration. Bessent was worried about an impact on financial markets and hurdles during the Senate confirmation process for whomever the president selects to be the next Fed chairman. Bessent's prediction proved prescient. Late Sunday, after the probe became public, Sen. Thom Tillis (R., N.C.) said he would oppose any Fed nominee put forward by Trump "until this legal matter is fully resolved."

Global Central Bank Heads Back Fed's Powell

Wall Street, Former Fed Officials Slam Powell Probe

Trump Didn't Direct DOJ to Investigate Powell, White House Says

Hassett Says Markets Should Welcome DoJ Investigation

Fed Chair Candidate Rick Rieder Wants to Drop Rates to 3%

The Fed-Trump Feud: What You Need to Know

Germany, Angola, Nigeria: Other Countries That Investigated Their Central Bankers

GOP Senators Criticize Probe of Fed Chair Powell

Senate Majority Leader John Thune (R., S.D.) said he hadn't seen the allegations against Powell, but "they better be real and they better be serious."

Thune said the issue "needs to be resolved quickly because the Fed's role and the Fed's independence in shaping monetary policy in the country is something we need to ensure proceeds without political interference."

Warren Says White House Weaponized DOJ Against Powell

New York Fed President Defends Chair Amid Investigation

New York Fed President John Williams said Jerome Powell has embodied the Fed's public mission

over his 13 years among its leadership ranks, praising his record of "calmly leading the Federal Reserve through times of heightened uncertainty."

He's Their Daddy. Meme-Stock Traders Rush to Powell's Defense.

Jerome Powell won over many individual investors for his stewardship of an economy that has helped propel the stock market to record highs. So when he delivered a stern message Sunday accusing the Trump administration of using the threat of criminal prosecution to pressure the Fed into making additional interest-rate cuts, some of those extremely online investors had his back .

ECB's Villeroy Backs Powell, Sees 2026 Rate Rise as 'Fanciful'

The European Central Bank is very unlikely to raise its key interest rate

this year, with a weaker dollar among a number of potential developments keeping eurozone inflation low, Bank of France Governor Francois Villeroy de Galhau said Monday.

U.S. Economy In Pivot on Affordability, Trump Unveils Barrage of Proposals to Address Costs

Until recently, President Trump has called Democrats' focus on affordability a hoax, but the issue has since taken on urgency

in his administration. The president has announced many proposals aimed at gaining more leverage over the economy and the cost of living. He has done it by upsetting Wall Street supporters and pitching ideas more closely associated with liberal Democrats.

Here in Midland, Texas, the Last Thing Anyone Wants Is Cheap Venezuelan Oil

For most Americans, cheap oil is good news. In Midland, Texas, it is a problem . Oil prices have mostly slumped since last spring, and the U.S. intervention in oil-rich Venezuela is stoking President Trump's desire to push prices down further. This raises a new risk for Midland, where restaurants are already less crowded, barbers are idling around waiting for customers and a host of businesses linked to the oil field are feeling squeezed.

Financial Regulation What 10% Credit-Card Rate Cap Would Mean for Your Wallet

In a move aimed at easing economic pressures on American households, President Trump is calling for a temporary 10% cap on credit-card interest rates .

Capital One to Pay $425 Million in 360 Savings Interest-Rate Settlement

Capital One Finance has agreed to pay $425 million

over claims it misled consumers about a high-yield savings program. A court on Monday preliminarily approved a settlement for restitution payments, New York Attorney General Letitia James said.

Maduro's Crypto-Backed Oil Deals Put Tether at Center of Venezuela Money Drama

Nicolás Maduro helped make tether the world's dominant stablecoin. And with the former Venezuelan leader now sitting in a Brooklyn jail, the cryptocurrency's central role in his nation's economy

is back in the spotlight.

Forward Guidance Tuesday (all times ET)

8:30 a.m.: CPI

10 a.m.: RCM/TIPP Economic Optimism Index

4 p.m.: Federal Reserve Bank of Richmond President Thomas Barkin speaks at CFA Society Washington, DC event

Wednesday

10 a.m.: FRB Philadelphia President Anna Paulson speaks at Chamber of Commerce for Greater Philadelphia State of the Economy event

10 a.m.: Online Help Wanted Index

10 a.m.: Existing Home Sales

12 p.m.: Federal Reserve Bank of Minneapolis President Neel Kashkari speaks at the Midwest Economic Forecast Forum

12 p.m.: FRB Atlanta President Raphael Bostic speaks at Atlanta Business Chronicle Economic Outlook event

2 p.m.: Federal Reserve Bank of New York President John Williams speaks at 'An Economy That Works for All' event

2 p.m.: U.S. Federal Reserve Beige Book

Research Dollar Could Face High Volatility in 2026 Amid Pressure on Fed

The dollar is expected to face increased volatility this year due to rising political pressure on the U.S. Federal Reserve, Rabobank's Jane Foley says in a note. Markets worry that the Fed could lose its independence due to the government's demands for lower interest rates and pressure on current chair Jerome Powell. However, some argue that members of the Federal Open Market Committee could provide balance against a Fed chair who favors lower interest rates amid elevated inflation, Foley says. Uncertainty around the credibility of the Fed going forward could put downward pressure on the dollar "without sending it into free-fall," Foley says. - Miriam Mukuru

Basis Points House prices in the U.K. are expected to rise

in 2026, with Scotland and Northern England showing the strongest growth and sales prospects and London and Southern England likely to lag, a report from real-estate website Zoopla said. The eurozone's saving rate fell in the third quarter

of last year, helping support the economy as spending modestly recovered. Trading volume across mainland Chinese stock exchanges reached a record high

of $521.80 billion on Monday, as a slow bull market is taking shape amid the country's supportive measures and progress on artificial intelligence. About Us

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ's global team of reporters and editors. This newsletter was compiled by markets reporter Vicky Ge Huang in New York. Send your tips, suggestions and feedback to [vicky.huang@wsj.com].

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

January 13, 2026 07:15 ET (12:15 GMT)

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