Some of Trump's allies are shocked by the subpoena of Powell, which may trigger risk aversion on Wall Street.

BlockBeats News, January 12, according to sources, some of Trump's allies were shocked by the Trump administration's decision to subpoena Powell. They are concerned that a legal battle against Federal Reserve Chairman Powell will disrupt the bond market. They also worry that this could make Powell reluctant to leave the Federal Reserve after his term as chairman ends in May. Powell can remain as a Federal Reserve governor until 2028, and he has not yet indicated whether he intends to follow tradition and leave the Fed.

It is reported that Trump's aides and allies are assessing the consequences and potential unintended effects of actions against Powell. Among the questions is how Wall Street will react after the market opens on Monday—the bond market is likely to see this as a threat to the Fed's independence. This also brings uncertainty to Trump's efforts to replace Powell with new leadership.

Evercore ISI analysts stated in a report that they are "shocked by this deeply disturbing development, which threatens the independence of the central bank. This is undoubtedly a risk-off move. We expect the dollar, bonds, and stocks to all fall in Monday's US trading session, similar to the peak of the tariff shock in April last year." (Golden Ten Data)