🚀 Fed Chair under criminal investigation

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Year To Date Performances:

1. In a stunning escalation of the conflict between the White House and the Federal Reserve, Chairman Jerome Powell announced that he is the target of a federal criminal investigation, a move he characterized as "political intimidation" aimed at undermining the central bank's independence. The probe, led by the U.S. Attorney’s Office for the District of Columbia under Trump appointee Jeanine Pirro, centers on a $2.5 billion renovation of the Fed’s historic headquarters and whether Powell misled Congress during his June 2025 testimony regarding cost overruns. While President Trump has publicly dismissed the investigation as a matter of "gross incompetence" in construction, Powell took the unprecedented step of releasing a video statement asserting that the threat of indictment is a direct consequence of the Fed’s refusal to enact the aggressive interest rate cuts demanded by the administration. This legal "pretext" has ignited a firestorm on Capitol Hill, with Republican Senator Thom Tillis vowing to block all future Fed nominees until the matter is resolved, while stock futures tumbled as investors weighed the risk of a politicized monetary policy. As Powell’s term as chair nears its May expiration, his defiance signals a historic standoff that could see him remain on the Board of Governors through 2028 purely to prevent the administration from installing a more compliant successor.

2. President Donald Trump threatened to blacklist Exxon Mobil from Venezuela’s massive oil reserves, accusing the energy giant of "playing too cute" after CEO Darren Woods labeled the country "uninvestable." During a tense White House summit with 17 industry leaders, Woods insisted that a "clean slate" is not enough to justify re-entry into a nation that twice expropriated Exxon’s assets; instead, he demanded fundamental reforms to Venezuela’s hydrocarbons law and durable legal protections that transcend individual administrations. Trump, who is pressuring U.S. firms to commit $100 billion to revitalize the crumbling infrastructure, dismissed these concerns by promising "total safety" through direct U.S. control of oil sales and military-backed security guarantees. While Chevron—currently the only major U.S. firm still operating on the ground—is already negotiating to expand its licenses and potentially double production, the administration’s public spat with Exxon highlights a growing friction between the White House's desire for immediate "energy dominance" and the cautious, long-term capital discipline of Big Oil.

3. India’s retail inflation rebounded to 1.33% in December, nearly doubling from the record lows of November as a seasonal spike in food costs began to reverse months of "goldilocks" price stability. Despite this acceleration, the headline Consumer Price Index (CPI) remained well below the Reserve Bank of India’s (RBI) 2% floor, marking the fourth consecutive month that inflation has undershot the central bank's medium-term tolerance band. While the moderate rise in food prices offers some relief to farmers who suffered through a deflationary "trap" earlier in 2025, policymakers remain deeply concerned by the resulting slump in nominal GDP growth, which is currently estimated at just 8.0%—a sharp drop from the government’s 10.1% budget forecast. This "inflation deficit" threatens to derail India's fiscal math by eroding tax revenue and inflating debt-to-GDP ratios, even as real GDP growth holds a robust 7.4% pace. To counter these disinflationary pressures and revive domestic demand, RBI Governor Sanjay Malhotra implemented a 25-basis-point interest rate cut in December, signaling a shift in focus from curbing prices to ensuring that a "low-inflation environment" does not transform into a period of prolonged economic stagnation.

   Headlines

   1. Bank stocks fell after Trump’s proposed cap on Credit Card interest rates.

   2. Gold hit a record high on Monday.