The January incident caused a market frenzy—The Department of Justice issued a subpoena to the Federal Reserve, involving the headquarters renovation project mentioned in Powell's congressional testimony last year, with charges of criminal prosecution. On the surface, this seems like a procedural issue, but the underlying signals are the real concern.

What the market is truly afraid of is not whether Powell will be convicted, but a deeper worry: Can the Federal Reserve's independence withstand political pressure? Powell himself said this is the government applying pressure under a pretext.

Looking at the market reaction that day makes it clear. Nasdaq futures fell by 0.7%, the US dollar index weakened, and the VIX fear index rose. Safe-haven assets surged—gold temporarily broke through $4600/oz, silver rose over 4%, and safe-haven currencies like the Swiss franc strengthened collectively. This is not without reason. Traders are using real money to express concerns about the stability of the policy framework.

In the short term, increased volatility is inevitable. But the issue is more complex.

If the Federal Reserve's decisions are no longer driven by economic data but start to consider political preferences, the entire monetary policy framework will be shaken. Long-term inflation expectations will rise, and the bond market will become volatile. An even more extreme consequence is the damage to the dollar's creditworthiness—this is the foundation of its reserve currency status. Once the dollar's attractiveness declines, how much capital will flow out?

There is also a key timeline to watch: Powell's term ends in May 2026. If the next chair is more "obedient" than Powell, the Fed's reaction function might shift to prioritize supporting economic growth and debt financing, while anti-inflation measures are marginalized. The global trend of de-dollarization could accelerate.

How to respond from a trading perspective? In the short term, safe-haven assets like gold, silver, and the Swiss franc are the top choices. US stocks and the dollar are temporarily weak; in a high-volatility environment, position sizes should be strictly controlled, and options can be considered for hedging. The mid-term key is to monitor several indicators—progress of investigations, White House statements, Fed officials' speeches, especially watch the TIPS implied inflation rate and changes in the US Treasury yield curve.

What about cryptocurrencies? Rising macro uncertainty could actually boost demand for safe-haven assets. Mainstream cryptocurrencies like Bitcoin and Ethereum may correlate with the risk-off logic of safe assets. But also be aware that volatility in risk assets might transmit back and cause pullbacks.