Recently, federal prosecutors launched a criminal investigation into Federal Reserve Chair Jerome Powell, which is actually a result of the intensifying divergence between Trump and Powell on monetary policy.

The trigger for the incident was the $2.5 billion renovation project at the Fed's Washington headquarters. The project started in 2022 and was originally scheduled to be completed in 2027, but it ended up overshooting the budget by $700 million. The investigation focuses on whether Powell made false statements to Congress regarding the luxurious amenities of the project (such as private elevators, VIP dining rooms, etc.).

In terms of personnel arrangements, Trump has already targeted Powell’s successor, with his top choice being Powell’s Chief Economic Advisor. Powell’s term as Chair ended this May, and although he can still serve as a Board member until 2028, his prospects are somewhat uncertain.

Honestly, this isn’t the first time such investigations have targeted Trump—evidence chains are often not solid enough, making prosecution quite difficult.

The market reacts very quickly. Once the news broke, the dollar weakened in Asian markets, gold prices even hit a new all-time high, and S&P 500 futures also fell by 0.3%. These fluctuations indicate that traders are reassessing the uncertainty surrounding Federal Reserve policies.