Powell Under Prosecution and the End of Fed Independence

Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. What's going on, guys? It is Monday, January 12. And today, we are talking about Powell being prosecuted. Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you wanna dive deeper into the conversation, come join us on the Breakers Discord. You can find a link in the show notes or go to bit.ly/breakdownpod. Well, man, I don't know what to say. If you thought there was any chance that 2026 was somehow gonna be less exciting than 2025, I've got the capture and extraction of a foreign president, NATO, setting up to defend Greenland against The US, ICE protests all around the country, whatever the hell is happening in Iran, and now some equally crazy macroeconomic news. On Sunday night, the New York Times reported that Jerome Powell, the chair of the Federal Reserve, has been served a subpoena and is under criminal investigation from the DOJ. The investigation stems from the renovation of the Fed's headquarters in Washington. You might recall Powell taking president Trump on a tour of the construction in July with both men decked out in white hard hats. At the time, Trump claimed the cost of the project had reached 3,100,000,000.0 up from a projected 2,700,000,000.0. Powell questioned the numbers live on air in front of the press, claiming they included a previous renovation that was finished five years ago. According to the New York Times, the new investigation centers around whether Powell lied to congress about the scope of the project during oversight hearings. So the criminal charge would then presumably be contempt of congress. While historically, this was a rare charge, it's been deployed multiple times over recent years. Steve Bannon served four months in prison for contempt, and former attorney general Merrick Garland avoided prosecution on the charge. In their reporting, The New York Times offered an opinion. Starting an investigation is one matter, they wrote. Presenting sufficient evidence to secure an indictment from a federal grand jury or making it stick is another. And at this point, this is something of a pattern. This administration has pursued multiple political prosecutions over the course of the last year. New York attorney general Letitia James and fed governor Lisa Cook were both indicted for mortgage fraud last year with the James case already thrown out of court. Within minutes of the New York Times article being published, the fed had a video message ready to go. A weary but resolute Powell stared down the barrel of the camera and explained that the DOJ served grand jury subpoenas on Friday threatening him personally with criminal indictment. It's short, so let me just play the clip here. Good evening. On Friday, the Department of Justice served the Federal Reserve with grand jury …