“President Donald Trump denied having any knowledge of the Justice Department’s investigation into the Federal Reserve after the agency subpoenaed the central bank Friday,” NBC News reports.
Said Trump: “I don’t know anything about it, but he’s certainly not very good at the Fed, and he’s not very good at building buildings.”
“The Trump administration’s decision to open a criminal investigation into Federal Reserve Chair Jay Powell has set off a political firestorm on Capitol Hill and across official Washington,” Punchbowl News reports.
“This is a long-feared and unwelcome chapter in the battle between President Donald Trump and ‘independent’ federal agencies.”
“Trump’s legal push will force Republicans to choose between maintaining the independence of the Fed — a key tenet for both parties — and a president who argues that high interest rates are hampering the U.S. economy.”
“The U.S. attorney’s office in the District of Columbia has opened a criminal investigation into Jerome Powell, the Federal Reserve chair, over the central bank’s renovation of its Washington headquarters and whether Mr. Powell lied to Congress about the scope of the project,” the New York Times reports.
“The inquiry, which includes an analysis of Mr. Powell’s public statements and an examination of spending records, was approved in November by Jeanine Pirro…”
“The investigation represents the opening of a major new legal front against Mr. Powell, whom Mr. Trump has continually attacked for resisting his demands to slash interest rates significantly.“
Wall Street Journal: Fed received Justice Department subpoena threatening criminal indictment.
Wall Street Journal: “After the brazen capture of Venezuelan strongman Nicolás Maduro, investors are racing to capitalize on President Trump’s ambitions to dominate the Western Hemisphere.”
“Hedge funds and other investment firms, already boosted by a sharp rally in Venezuelan debt, are mapping out trips to Caracas to scope out on-the-ground opportunities. Some are investigating niche instruments, like arbitration claims and unpaid state debts.”
“Others are eyeing debt in Colombia and Cuba, while shares of a tiny bank in Greenland—another territory in Trump’s sights—have surged recently as the U.S. president pursues his own spin on the Monroe Doctrine that saw 19th-century America claim half of the globe as its sphere of influence.”
“President Donald Trump has called on credit card companies to cap interest rates at 10 percent for a year, effective from Jan. 20, without specifying how the proposal could be implemented or enforced,” the Washington Post reports.
Associated Press: Americans would save $100B if credit card rates were capped as Trump proposed.
President Trump said he is “instructing my Representatives” to buy $200 billion in mortgage bonds, claiming that doing so will drive rates and monthly payments down, CNBC reports.
President Trump is moving to ban large investors from buying single-family homes, a potential blow for private-equity landlords, the Wall Street Journal reports.
Said Trump: “I am immediately taking steps to ban large institutional investors from buying more single-family homes, and I will be calling on Congress to codify it. People live in homes, not corporations.”
It isn’t clear if Trump can carry out the ban without congressional approval.
“President Trump spent his first year back in the White House coming up with new ways to chip away at the Federal Reserve’s political independence and pressure the central bank to accede to his demands for lower borrowing costs,” the New York Times reports.
“His second year in office is poised to put the Fed’s autonomy to an even more extreme test — one that many worry will undermine the central bank’s ability to base monetary policy decisions on what is most appropriate for the economy, rather than what will benefit the White House.”
“Less than five hours before nighttime explosions rocked the Venezuelan capital of Caracas, an unknown trader doubled down on bets that Nicolás Maduro would soon be out as the country’s leader,” the Wall Street Journal reports.
“The wagers on Polymarket, a popular crypto-based betting platform, netted the trader more than $400,000, a 12-fold return on investment—and fueled suspicions that someone used inside knowledge of the closely held U.S. operation to make a quick profit.”
Trump Media plans to issue a new cryptocurrency, which will be distributed among its shareholders, Bloomberg reports.
The company, which operates President Trump’s Truth Social platform, said the new token will be allocated to investors in a partnership with crypto exchange Crypto.com.
“President Trump teased that he has a preferred candidate to be the next head of the Federal Reserve but is in no hurry to make an announcement while also musing that he might fire the central bank’s current leader, Jerome Powell,” the South China Morning Post reports.
Trump said that Powell “should resign” and that he would “love to fire him.”
He added: “Maybe I still might.”
Washington Post: Trump says he might sue Fed Chair Jerome Powell for “gross incompetence.”
“U.S. stocks have been eclipsed by market gains in the rest of the world in 2025, as worries about high valuations, a Chinese artificial intelligence breakthrough and Donald Trump’s radical economic policies contributed to a rare year of underperformance for Wall Street,” the Financial Times reports.
“The S&P 500 was up 17 percent this year in early trading on Monday, undershooting the 29 percent gain for the MSCI All Country World ex-U.S. index by the widest margin since the global financial crisis in 2009.”
“For years, Kevin Hassett, an economist who advised the presidential campaigns of John McCain, George W. Bush and Mitt Romney, favored classic conservative economic principles. A longtime scholar at the right-leaning American Enterprise Institute, he promoted the idea that free trade was the path to national prosperity and argued that more immigration was good for the economy,” the New York Times reports.
“But as the director of President Trump’s National Economic Council, Mr. Hassett’s policy views are barely recognizable to those who have known him for decades. These days he supports tariffs and claims they are having little impact on consumer prices. He also says deportations are healthy for a labor market that has long relied on immigrants…”
“Mr. Hassett’s ability to adjust his policy positions as needed has allowed him to rise within the president’s orbit of advisers and helped put him in pole position to be Mr. Trump’s pick for the next chair of the Federal Reserve. As one of the front-runners on Mr. Trump’s shortlist to replace Jerome H. Powell, investors and policymakers have been straining to divine what Mr. Hassett truly believes, and if he wins the job, whether he will be able to endure political pressure from the White House to cut interest rates at all costs.”
Wall Street Journal: “A fight over the next Fed chair is playing out in Washington and on Wall Street, with industry titans and Trump allies taking sides and the candidates themselves jockeying for position.”
“Some Wall Street insiders have been advocating for Warsh, calling administration officials to make the case for him with the goal of edging Hassett out of contention, according to people familiar with the outreach. The campaign has focused, in part, on the argument that Hassett is too close to Trump to have credibility with bond markets as an independent Fed chair. Some in Trump’s orbit have grown frustrated by the maneuvering.”
“Speaker Mike Johnson will meet with a small group of House Republicans on Thursday afternoon who will use the meeting to push to make a congressional stock trading ban part of the GOP’s agenda,” Bloomberg reports.
New York Times: “The decision comes down to who Mr. Trump believes will be more successful in delivering the substantially lower borrowing costs that he has long struggled to get from the Fed under Mr. Powell. Mr. Trump, who elevated Mr. Powell to chair in 2017, appears haunted by that decision. He has made it clear that this time he wants someone more malleable who will take his advice.”
“That prerequisite creates a credibility problem for whoever is selected, one that will be difficult to escape. A chair who is seen as beholden to the president risks eroding the public’s confidence that the Fed is making decisions in the best interest of the economy, not the White House. If that crumbles, borrowing costs could move higher, not lower as the president wants.”
“White House economic adviser Kevin Hassett is a frontrunner to be President Donald Trump’s choice to chair the Federal Reserve, but some in the administration are questioning whether he’s up to the job,” Politico reports.
“Hassett’s detractors believe he has not been effective as head of the National Economic Council other than as a public messenger for the president’s agenda, playing little part in driving policies.”
“President Trump said he was leaning toward choosing either former Fed governor Kevin Warsh or National Economic Council Director Kevin Hassett to lead the Federal Reserve next year,” the Wall Street Journal reports.
“Hassett has been increasingly viewed as the front-runner after Trump repeatedly teased in recent weeks that he had settled on his choice to lead the Fed, but Trump’s comments suggest Warsh remains solidly in contention.”
Taegan Goddard
Taegan Goddard is the founder of Political Wire -- which for more than two decades has been one of the nation's most influential political news sites.
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