{"id":5896,"date":"2026-01-13T17:54:31","date_gmt":"2026-01-14T01:54:31","guid":{"rendered":"https:\/\/abovecloud.xyz\/?p=5896"},"modified":"2026-01-13T17:57:53","modified_gmt":"2026-01-14T01:57:53","slug":"the-sell-america-market-returns-after-dojs-criminal-probe-of-the-fed-spooks-investors","status":"publish","type":"post","link":"https:\/\/abovecloud.xyz\/?p=5896","title":{"rendered":"The ‘Sell America’ market returns after DOJ’s criminal probe of the Fed spooks investors"},"content":{"rendered":"\n

The U.S. dollar fell and market barometers for interest rates rose, both trends that run directly counter to the Trump administration\u2019s affordability push.
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When investors around the world woke up Monday to news that the U.S. Justice Department had subpoenaed the Federal Reserve in a criminal investigation, it rekindled fears about whether America was still the gold standard for investment.<\/p>\n\n\n\n

The result was a return of what is dubbed a \u201cSell America\u201d market, which first emerged last April after President Donald Trump’s surprise tariff announcement.<\/p>\n\n\n\n

Fed Chair Jerome Powell said the criminal probe was an intimidation tactic by the Trump administration because the president was frustrated by the central bank’s independent decisions on interest rates and its refusal to comply with Trump\u2019s demands for ultra-low rates.<\/p>\n\n\n\n

Powell\u2019s statement immediately set off alarms for investors and trading desks around the globe. The S&P 500 and Nasdaq opened slightly lower before ending the day slightly higher.<\/p>\n\n\n\n

The yields on U.S. government bonds soared to the highest levels since September 2025, a sign of worry in the markets that a less independent Federal Reserve might not be able to control inflation. Yields for the 10-year Treasury, which mortgage rates closely track, rose above 4.2%, and the 30-year Treasury yield, which is often viewed as a barometer of future inflation, rose above 4.8%. Those declines largely faded by midafternoon, though.<\/p>\n\n\n\n

The U.S. dollar also weakened against every major currency. As of 4 p.m. ET, the ICE U.S. dollar index, which measures the dollar\u2019s performance against a basket of foreign currencies such as the euro, pound sterling and yen, was down 0.3%, nearly to its lowest level since early December.<\/p>\n\n\n\n

A decline in the dollar directly makes it more expensive for U.S. companies to import products from overseas and for consumers to travel or study abroad. It also lowers the value of American exports, because products that are paid for in foreign currencies are worth less in dollars than they had been just a few days ago.<\/p>\n\n\n\n

The rise in interest rates and the drop in the dollar also run directly counter to the administration\u2019s recent affordability push.<\/p>\n\n\n\n

“The Federal Reserve\u2019s independence and the public\u2019s 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,” former Fed chairs Ben Bernanke, Janet Yellen and Alan Greenspan said in a statement alongside several former Treasury secretaries.<\/p>\n\n\n\n

\u201cPowell has explicitly characterised this as an attack on the Fed\u2019s independence from the Trump administration,\u201d strategists at ING wrote in a client note Monday.<\/p>\n\n\n\n

\u201cThe combined drop in the dollar, equities and Treasuries was a reminiscence of the \u2018sell America\u2019 days of last spring,\u201d they said.<\/p>\n\n\n\n

In April 2025, stocks fell precipitously and Treasury yields and precious metals soared after Trump\u2019s \u201cLiberation Day\u201d tariff rollout.<\/p>\n\n\n\n

Precious metals soared again Monday. The price of gold rose 2% and the price of silver rose more than 6.2%.<\/p>\n\n\n\n

After that episode last spring, the credit rating agency Moody\u2019s downgraded the United States\u2019 credit rating but said that it maintained a \u201cstable outlook\u201d for America\u2019s economy nonetheless.<\/p>\n\n\n\n

\u201cThe U.S. retains exceptional credit strengths such as the size, resilience and dynamism of its economy and the role of the US dollar as global reserve currency,\u201d Moody\u2019s wrote in May<\/a>. \u201cIn addition, while recent months have been characterized by a degree of policy uncertainty, we expect that the U.S. will continue its long history of very effective monetary policy led by an independent Federal Reserve.\u201d<\/p>\n\n\n\n

Eight months later, investors Monday were clearly signaling that the future of the Fed’s independence was in question once again.<\/p>\n\n\n\n

\u201cThe readiness to use criminal subpoenas to pressure the Fed will make it even harder for the next chair to convince markets and the public of his own technocratic independence, making it harder to control inflation and inflation expectations,\u201d Krishna Guha of Evercore ISI wrote to clients Monday.<\/p>\n\n\n\n

\u201cWe hope Bessent\/Republicans in Congress will recognize this and find an off-ramp,\u201d Guha said, referring to Treasury Secretary Scott Bessent.

Monday\u2019s market moves also came amid a surprise rollout of Trump policy plans in recent days that target private industries.<\/p>\n\n\n\n

On Wednesday, the president blindsided Wall Street when he posted on social media<\/a> that he was \u201cimmediately taking steps to ban large institutional investors from buying more single-family homes.\u201d Trump said he would discuss the issue further at the World Economic Forum gathering in Switzerland later this month.<\/p>\n\n\n\n

While institutional investors own a very small percentage of homes nationwide, shares of firms such as Blackstone and Invitation Homes dropped sharply after Trump’s post.<\/p>\n\n\n\n

On Wednesday, Trump said<\/a> he would not permit major defense companies to issue dividends or buy back their own stock, sending shares of those firms tumbling.<\/p>\n\n\n\n

Yet just hours after the dividend post, Trump said he would request<\/a> a massive increase to the U.S. annual defense budget, sending those same companies\u2019 stocks soaring back up.<\/p>\n\n\n\n

In a post on Thursday, Trump called for $200 billion<\/a> in mortgage bond buying, which rocked the mortgage market but triggered sharp declines in typically slow-moving mortgage rates.<\/p>\n\n\n\n

Over the weekend, the White House touted the declining mortgage rates as an example of how Trump’s policies were making everyday life more affordable.<\/p>\n\n\n\n

Monday\u2019s increase in Treasury yields, however, could be a sign that those rates are about to rise again.<\/p>\n\n\n\n

On Friday, Trump hit corporate America with another intervention, demanding that credit card issuers cap interest<\/a> rates at 10% for one year. Banks balked at Trump\u2019s request, saying through an industry lobbying group that a cap \u201cwould reduce credit availability and be devastating for millions of American families and small businesses.\u201d<\/p>\n\n\n\n

Trump on Sunday hit back at the companies. \u201cWe\u2019re putting a one-year cap at 10% and that\u2019s it,\u201d he said on Air Force One. Trump said card companies would be \u201cin violation of the law\u201d if they did not comply.<\/p>\n\n\n\n

It was unclear what legal mechanism Trump would use to force card issuers to lower their interest rates.<\/p>\n\n\n\n

Shares of the country\u2019s top credit card issuers plunged Monday. Capital One slid more than 6% as American Express dropped 4.2% and Citigroup dropped 3%.<\/p>\n\n\n\n

Top banks, such as JPMorgan Chase, Bank of America and Wells Fargo, dipped around 1%.<\/p>\n\n\n\n

Trump has also demanded that oil companies invest in Venezuela, after his administration removed Venezuelan President Nicol\u00e1s Maduro from power on Jan. 3.<\/p>\n\n\n\n

On Friday, in a roundtable at the White House, ExxonMobil CEO Darren Woods called Venezuela \u201cuninvestable.\u201d<\/a> Trump threatened to retaliate against the oil giant over that remark.<\/p>\n\n\n\n

\u201cI didn\u2019t like Exxon\u2019s response,\u201d Trump told reporters on Air Force One on Sunday night. Speaking about Venezuela\u2019s oil, Trump said that \u201cwe have so many that want it\u201d before adding that he would \u201cbe inclined to keep Exxon out.\u201d<\/p>\n\n\n\n

The operation to remove Maduro has whipsawed oil prices, which fell in the days after the Jan. 3 operation, but were up more than 3% for the year as of Monday afternoon. <\/p>\n","protected":false},"excerpt":{"rendered":"

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