US Treasury’s Warning on Fed Chair Probe Risks Market Stability

3 mins mins

Key Points:

US Treasury Secretary warns of market risks due to Fed Chair probe.
Trump distances from investigation; no White House direction alleged.
Tensions between financial leaders may affect market confidence.

On January 12th, US Treasury Secretary Scott Bessent expressed concern to President Donald Trump about a federal investigation into Federal Reserve Chairman Jerome Powell, potentially destabilizing financial markets.

This development could impact market stability and disrupt the Federal Reserve’s leadership, as Powell adopts a firmer stance amidst the investigation led by US Attorney Jeanine Pirro.

Treasury’s Concerns Over Powell Investigation’s Economic Impact

US Treasury Secretary Scott Bessent expressed frustration to President Trump over an ongoing investigation into Federal Reserve Chairman Jerome Powell. Bessent highlighted the probe’s potential to destabilize financial markets, emphasizing concerns over its launch without notifying key administrative bodies. The investigation reportedly blindsided White House aides, who expressed alarm at its economic implications.

Market stability concerns arise as Powell retaliates by taking a firmer stance against potential external influences on Fed operations. This situation intensifies the uncertainty in economic leadership dynamics. While Bessent did not challenge the investigation’s necessity, his warnings stressed avoidable market disruptions, hinting at complex internal evaluations.

A notable figure, former adviser Stephen Moore, remarked on the potential impact on market confidence, suggesting caution. He stated, “This feud between Powell and the White House is, obviously, not good for markets,” and “now is not the time to be bringing a criminal investigation against the Fed chairman.” These insights and responses illustrate the perceived risks in political-financial interactions.

Bitcoin Trends Amid Market Volatility and Regulatory Discourse

Did you know? In similar instances, prior probes into high-level officials have historically led to heightened market volatility, influencing interest rate adjustments and impacting investor confidence significantly in past economic scenarios.

Bitcoin, as of January 13, 2026, trades at $91,280.45 with a market cap of 1.82 trillion USD, maintaining a dominance of 58.69%. Recent 24-hour trading reflects $40.86 billion in volume, increasing by 135.97% according to CoinMarketCap. The cryptocurrency’s 30-day price rose by 1.18%, despite a 19.12% drop over 90 days, suggesting a nuanced investor sentiment.

bitcoin-daily-chart-5605 — Bitcoin(BTC), daily chart, screenshot on CoinMarketCap at 00:12 UTC on January 13, 2026. *Source: CoinMarketCap*

The Coincu research team suggests potential regulatory challenges may arise from similar investigations in the traditional financial sector, creating a complicated landscape for market dynamics. These uncertainties typically invite broader regulatory discourse, affecting investor perceptions and decision-making pathways in precarious economic climates.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.