In a dramatic escalation of President Trump’s Fed feud, Chair Powell said the Fed has been served grand jury subpoenas from the Justice Department threatening criminal indictment over misstatements in Powell’s June congressional testimony on ongoing renovations of the Fed’s headquarters. On Sunday evening, Chair Powell issued a totally unprecedented video statement accusing the President of extortion, “The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President.”
Following reported deaths of 490 Iranian protestors and 48 regime security personnel (Reuters), President Trump told reporters on Air Force One that Iran is “starting to” cross his red lines and he is considering what he called very strong options, “They’re starting to, it looks like, and there seem to be some people killed that aren’t supposed to be killed…Iran’s in big trouble. It looks to me that the people are taking over certain cities that nobody thought were really possible just a few weeks ago.”
The combination of President Trump’s attacks on Fed independence and percolating Iranian tensions reignited “Sell America” sentiment in financial markets (U.S. dollar, Treasuries and U.S. equity futures trading down) and rallied spot gold ($4,600) and spot silver ($84.60) to new all-time highs in early Monday morning trading.
On Monday in Washington, Treasury Secretary Bessent is hosting 12 finance ministers from Group of 7 nations plus the EU, Australia, India, South Korea, and Mexico (60% of global demand for critical minerals) in a summit to increase urgency in reducing reliance on critical minerals from China.
In a joint Friday statement, China’s Ministry of Finance and State Taxation Administration announced cancellation of VAT rebates for exports of Chinese photovoltaic products effective 4/1/26. Additionally, VAT export rebates for 22 battery-related products will be cut from 9% to 6% between April and December and scrapped entirely beginning 1/1/27. These moves are components of China’s anti-involution strategy to reduce over capacity in various industrial sectors.Euro Stoxx 50 +0.1%, S&P futures -0.55% and Nasdaq futures -0.75%, DXY dollar index -0.35%, spot gold +1.72%, and spot silver +5.25% (gold/silver ratio at 54.6).