This is a criminal investigation into Jerome Powell, which is different from previous criticism and disputes between presidents and the Fed.
Richard Quest
Jim Bianco
The Federal Reserve chairman is the second most powerful man in Washington, and while Powell has shown he can handle nasty words, a criminal investigation that appears to be punishment for not cutting interest rates fast enough crosses a Rubicon.
Powell himself connected the investigation to Trump's dissatisfaction with interest rate policy, making it extraordinary.
Richard Quest
This has long-term implications for Fed independence and integrity, and medium-term implications since Powell's term is ending soon.
Richard Quest
Jim Bianco
Powell has only about five months left, and this investigation may be a signal to the next Fed chairman that Trump can fire them if they don't stay in line.
Respected potential successors like Kevin Warsh might not want the job under these circumstances.
Richard Quest
With so much happening globally, this may matter more than anything else because the US cannot function if international investors stop buying American assets.
Richard Quest
Jim Bianco
Markets are aware Powell is one vote on the FOMC, they're not going to move this month or next month because of this, and they're ultimately hoping this goes away.