$WLD
🚸🔞 Markets widely view the DOJ’s criminal investigation into Powell regarding the Fed’s $2.5 billion headquarters renovation as a pretext for applying political pressure to push for monetary easing ⚡️🙄
Fed independence under threat → "Independence Premium" eroding 👀
Historically, credible Fed insulation anchored inflation expectations. Perceived compromise risks reviving 1970s-style fiscal dominance, potentially adding 50-100 bps to breakeven inflation as markets price politicized policy ⚡️
Succession scenarios ↔️⬇️
- Vice Chair steps in → viewed as stability/technocratic continuity.
- Trump-appointed interim chair (via Trump v. Cook precedent) → "regime change" risk, likely triggering sharp DXY sell-off as reserve currency loses electoral-cycle shield ↔️
Yield curve impact ⬇️
Probe hits long end hardest. 10Y yield ~4.24% (Jan 28), showing bear steepening—long rates rising faster than short as term premium climbs on sovereign/central bank risk concerns. Short end stays tied to FOMC path 📢
Today (Jan 28, 2026), FOMC widely expected to hold rates steady as a show of resolve amid the probe. But structural reputational damage persists until SCOTUS clarifies Trump v. Cook or DOJ resolves the case 👀
Outlook 👀
Brace for DXY volatility (currently ~96.46, down ~10.7% YoY) and persistent upward pressure on long-duration yields as markets recalibrate for a less independent Fed 👀
🚸 Warning 🚸 I do not provide financial advice 🔞The intent of this content is for you to be aware of market conditions before starting to invest 👌Thank you for reading 👌