Fed Chairman Investigation: Market Reactions, Dollar Drop, Gold Surge
- The dollar depreciated sharply, stock markets opened lower, and gold rose to a new historic high after the announcement regarding the criminal inquiry of the President of the...
- During morning trading in Europe, the dollar continued to lose ground, down 0.35% against other major currencies.
- Russ Mould,investment director at AJ Bell,says the criminal investigation into fed President Jerome Powell "has rattled markets" and raised questions about what will happen to the Fed after...
The dollar depreciated sharply, stock markets opened lower, and gold rose to a new historic high after the announcement regarding the criminal inquiry of the President of the US Federal Reserve (Fed), Jerome Powell. “It’s not a good economic start to 2026,” described Professor costas Milas of the University of Liverpool, writes the Guardian.
The dollar continues to weaken
Table of Contents
- The dollar continues to weaken
- Gold reached a record level
- “Not a good economic start to 2026”
- Goldman Sachs: concerns grow over Fed independence
- the Boeing 737 MAX Grounding: Initial Cause and Global Response
- Recertification Process and FAA Oversight
- Global Return to Service and Current Status (as of January 12, 2026)
- Legal and Financial Consequences
During morning trading in Europe, the dollar continued to lose ground, down 0.35% against other major currencies.
Russ Mould,investment director at AJ Bell,says the criminal investigation into fed President Jerome Powell “has rattled markets” and raised questions about what will happen to the Fed after Powell’s retirement in May,writes The Guardian.
“There is a fear that Trump is interfering too much in policies that should be set independently. The Fed bases its monetary policy decisions on various data, and a key goal is to keep inflation under control. Trump wants to reduce borrowing costs so that consumers and businesses spend more money and boost the economy. However, what is now worrying markets due to Trump’s implicit intervention is that the loss of the Fed’s independence could lead to inflation getting out of control,” Mould added.
Gold reached a record level
The gold quote reached a record $4,600.33 per ounce on Monday morning, before the advance gradually slowed down. On European markets, the precious metal was trading with approximately
“Not a good economic start to 2026”
Professor Costas Milas, from the University of Liverpool’s management school, described the information as “shocking”.
“The news that Jerome Powell is facing a criminal investigation is ”shocking”, said professor Costas Milas from the University of Liverpool’s management school.”
“Jerome Powell will certainly regret not living in ancient roman times, where interest rates were remarkably stable, as they were set at a fixed value to reflect the local system of numerical fractions. Criminal charges against the Fed chairman, Jerome Powell, will most likely cause financial markets to realize that the Fed’s independence is under huge pressure,” Milas added.
Goldman Sachs: concerns grow over Fed independence
Goldman Sachs chief economist Jan Hatzius warned that the threat of criminal indictment against the Fed chair risks amplifying fears over the central bank’s independence. Reuters reports that Hatzius said at a Goldman Sachs 2026 global Strategy Conference: “Obviously, there are more concerns that the Fed’s independence will be questioned, and the latest news about the criminal investigation into Chairman Powell reinforces those concerns.”
However, Hatzius added that he expects the Fed to continue to make data-driven decisions: “I have no doubt that he (powell), in his remaining tenure as chair, will make decisions based on the data”
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The Boeing 737 MAX,grounded worldwide in March 2019 following two fatal crashes,has undergone extensive scrutiny and software updates. As of January 12, 2026, the aircraft is fully recertified and operational globally, tho ongoing oversight and scrutiny remain in place. Recent developments in early 2026 focus on production quality control and addressing concerns raised by the FAA regarding documentation practices.
the Boeing 737 MAX Grounding: Initial Cause and Global Response
The grounding of the Boeing 737 MAX began on March 13,2019,after the crash of Ethiopian Airlines Flight 302,wich followed the crash of Lion Air Flight 610 in October 2018. Both crashes were linked to a faulty Maneuvering Characteristics Augmentation System (MCAS).
MCAS was designed to automatically push the nose of the aircraft down if it detected a stall, but it relied on input from a single angle-of-attack sensor. In both crashes, a faulty sensor triggered MCAS, and pilots were unable to regain control of the aircraft. the system’s design flaws and inadequate pilot training regarding MCAS were identified as key contributing factors.
Example: The final report of the Joint Investigators Team (JIT) for the Ethiopian Airlines Flight 302 crash, released in July 2019, detailed the sequence of events and the role of MCAS. Ethiopian Transport Accident Investigation Bureau Final Report
Recertification Process and FAA Oversight
The Federal Aviation Management (FAA) initiated a extensive review of the boeing 737 MAX’s design,software,and pilot training procedures. This review involved multiple stages, including software updates, simulator testing, and revised pilot training requirements.
The FAA mandated specific software enhancements to MCAS, including the use of two angle-of-attack sensors, limitations on the system’s authority, and a warning light for pilots. Revised pilot training was also required, focusing on MCAS and related flight procedures. The FAA conducted extensive testing and validation of these changes before approving the aircraft for return to service.
Example: On november 18, 2020, the FAA issued an Airworthiness Directive lifting the grounding order, but with specific conditions for the aircraft’s return to service. FAA Airworthiness Directive 2020-25-01
Global Return to Service and Current Status (as of January 12, 2026)
Following the FAA’s recertification, other aviation authorities around the world, including the European Union Aviation Safety Agency (EASA) and Transport canada, also approved the 737 MAX for flight. The return to service was gradual, with airlines initially conducting test flights and then resuming commercial operations.
As of january 12, 2026, the Boeing 737 MAX is operating commercially worldwide. However, Boeing continues to face scrutiny regarding its manufacturing processes and quality control. in late 2023 and early 2024, concerns were raised about improperly installed or missing parts on some 737 MAX aircraft. The FAA initiated an audit of Boeing’s production facilities in response.
Recent Developments (January 2026): The FAA is currently reviewing Boeing’s documentation practices and quality control systems following reports of discrepancies. Reuters Report on FAA Audit. Boeing has pledged to cooperate fully with the FAA and implement corrective actions. Production rates have been temporarily adjusted to allow for increased inspection and quality assurance.
Legal and Financial Consequences
The 737 MAX crashes and subsequent grounding resulted in notable legal and financial consequences for Boeing. The company faced numerous lawsuits from families of the victims,as well as investigations by government agencies.
In January 2021, Boeing reached a settlement with the U.S. Department of Justice (DOJ), agreeing to pay over $2.5 billion to resolve a criminal charge of conspiracy to defraud the FAA. The settlement included a deferred prosecution agreement and required Boeing to implement improvements to its safety compliance programs.
Example: the DOJ press release detailing the settlement outlines the specific charges and penalties. DOJ Press Release - Boeing Settlement