U.S. Central Bank Independence Questioned
January 12, 2026—The price of precious metals soared to new heights as the U.S. central bank’s independence came under greater political pressure. Gold and silver reached record highs, at $4,600 a troy and $86 an ounce, respectively. It comes as global investors grow wary of the increased political pressure by President Donald Trump on the Federal Reserve. Investors fear the central bank is losing autonomy to curb long-term inflation in the United States. Intensifying geopolitical tensions are also weighing on the markets.
Year on year, gold prices increased by 70 percent, up from $2,715 a troy. Silver, meanwhile, swelled by 183 percent, from $30 an ounce in January 2025 to $86 an ounce today.
Investors are placing bets on whether or not the U.S. central bank will maintain its ability to determine monetary policy, free of political pressure.
Criminal Probe by Subpoenas
In an escalation of the building tensions between the Trump administration and the Federal Reserve, the U.S. Justice Department issued grand jury subpoenas to the central bank. The subpoenas threaten criminal charges relating to a $2.5 billion renovation at the Fed headquarters.
Federal Reserve Chair Jerome Powell announced the probe in a video and written statement Sunday evening, calling it a pretext that shields the underlying issue. The real issue, Powell said, is whether or not the central bank would be able to maintain independence to make decisions over interest rates based on economics rather than political pressure.
“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 said. “This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation.”
Update on the Probe: Judge Blocks Case Against Fed Chair, Citing Political Motives by Trump
Pressure Campaign
White House Press Secretary Karoline Leavitt denied that President Trump directed the DOJ to investigate Federal Reserve Chair Jerome Powell, whom Trump has repeatedly condemned over the past year for over the Fed’s interest rates policy.
“The president has every right to criticize the Fed chair. He has a First Amendment right, just like all you do. The one thing for sure, the president has made it quite clear, is Jerome Powell is bad at his job. As for whether or not Jerome Powell is a criminal, that is something the Department of Justice is going to have to find out,” Leavitt told reporters outside the White House on Monday.
Big Names Back Powell, Fed’s Independence
On Monday, a bipartisan group of former Fed chairs, economists, and Treasury secretaries released a joint statement supporting the independence of the Federal Reserve.
“The Federal Reserve’s independence and the public’s perception of that independence are critical for economic performance, including achieving the goals Congress has set for the Federal Reserve of stable prices, maximum employment, and moderate long-term interest rates. The reported criminal inquiry into Federal Reserve Chair Jay Powell is an unprecedented attempt to use prosecutorial attacks to undermine that independence. This is how monetary policy is made in emerging markets with weak institutions, with highly negative consequences for inflation and the functioning of their economies more broadly. It has no place in the United States whose greatest strength is the rule of law, which is at the foundation of our economic success.”
The list of signatories included former Treasury secretaries Henry Paulson, Robert Rubin, Timothy Geithner, and Jacob J. Lew, Former Fed chair Alan Greenspan, Janet Yellen, and Ben Bernanke, Phil Gramm , former Chairman of the Senate Banking Committee, and economists and former officials Kenneth Rogoff, Christina Romer, N. Gregory Mankiw, Glenn Hubbard , Jason Furman, Jared Bernstein.
