DOJ Subpoenas Fed Chair Powell; Bitcoin Reclaims $92K

The Attack on the Fed

The firewall between the White House and the Federal Reserve has collapsed. In an unprecedented move, the Department of Justice served grand jury subpoenas to the Federal Reserve on Friday, launching a criminal investigation into Chair Jerome Powell. The indictment threat centers on Powell’s June 2025 testimony regarding the $2.5 billion renovation of the Fed’s Washington headquarters.

Markets reacted violently to the institutional rupture. While traditional equities shuddered, Bitcoin surged 4% to reclaim $92,120, validating the asset’s thesis as a hedge against the politicization of money. The signal is clear: when the world’s reserve currency issuer faces an executive takeover, liquidity flees to neutral ground.

The Pretext: Marble and Mortar

Prosecutors allege Powell misled the Senate Banking Committee about cost overruns and “ostentatious” design elements, specifically marble fixtures and VIP dining facilities, in the central bank’s HQ refit. The investigation, authorized by U.S. Attorney Jeanine Pirro, frames the issue as an abuse of taxpayer dollars.

Powell, typically reserved, issued a blistering video statement Sunday night rejecting the premise entirely. He characterized the probe as a thinly veiled retaliation for the Fed’s refusal to slash interest rates at the President’s demand.

“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.” Jerome Powell, Federal Reserve Chair

Institutional Fallout

The conflict places the U.S. monetary system in uncharted territory. The Fed’s independence is the bedrock of Treasury market stability; criminalizing its leadership for policy decisions signals a shift toward the “emerging market” governance model warned of by former Fed chairs.

Sen. Thom Tillis (R-NC) confirmed the gravity of the escalation: “If there were any remaining doubt whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none.”

The Crypto Bid

The macro narrative for crypto has shifted from speculation to survival. With the U.S. dollar’s governance now a matter of open political warfare, Bitcoin’s correlation with risk assets is breaking. It is trading as a sovereign-grade haven.

Traders are pricing in a scenario where monetary policy becomes an arm of executive will. If the Fed blinks, inflation targets become suggestions. Bitcoin at $92K is the market’s vote of no confidence in that future.