‘America for Sale’ makes a comeback on Wall Street as Trump intensifies his challenge to Jerome Powell and the Federal Reserve

Market Turmoil Follows Federal Reserve Investigation

On January 6, 2026, traders on the floor of the New York Stock Exchange reacted swiftly to news of a criminal probe into Federal Reserve Chair Jerome Powell by the Trump administration. The announcement triggered a wave of selling across US stocks, bonds, and the dollar, as investors revived the so-called "Sell America" strategy.

Stock futures opened the week on a negative note. Dow futures dropped by 350 points, or 0.7%, while S&P 500 futures slipped 0.6%. Contracts linked to the Nasdaq fell by 0.9%.

The US dollar also lost ground against other leading currencies. The dollar index, which measures the greenback’s performance against six major currencies, declined by 0.4%—a significant move for the currency market.

US Treasury prices dipped as well, pushing the yield on the benchmark 10-year note to just below 4.2%, its highest level in about a month. The uptick in yields suggests that the administration’s actions against the Fed could have unintended consequences, potentially preventing the rate cuts President Trump has been seeking.

Maintaining the Federal Reserve’s independence is widely seen as vital to the strength and stability of US financial markets. Experts across finance and academia agree that an autonomous central bank is essential for sound monetary policy, free from political interference.

Last year, the Trump administration took unprecedented steps to challenge the Fed’s autonomy, publicly criticizing Powell for not reducing interest rates as rapidly as the president desired.

Lowering interest rates can make borrowing cheaper for consumers, including lower credit card rates. However, if the central bank cuts rates too aggressively without considering inflation, it can unsettle investors, who may then demand higher returns to compensate for increased risk in US assets.

“This is clearly a risk-off environment,” commented Krishna Guha, vice chairman at Evercore ISI, in a note released Sunday.

The current market reaction echoes the "sell America" trend seen in spring 2025, when concerns over Trump’s trade policies led investors to pull out of US assets. That episode saw sharp declines in stocks, bonds, and the dollar, nearly pushing equities into bear market territory before a late-year rebound as the administration eased some tariff threats.

Guha added, “We anticipate declines across the dollar, bonds, and stocks in Monday’s session, much like the sell-off during last April’s tariff shock and earlier challenges to Powell’s leadership at the Fed. Global investors are now demanding a higher risk premium for US assets. Meanwhile, gold and other safe havens are likely to benefit.”

Gold, often sought in times of uncertainty, surged 2% to reach new highs above $4,600 per troy ounce on Monday morning. Silver also jumped, climbing 6% and outpacing gold’s gains.

Flight to Hard Assets Amid Uncertainty

The rally in gold and silver reflects what Wall Street calls the “debasement trade.” Investors are turning to tangible assets like precious metals, which are not tied to the reputation of any government, as concerns mount over the value of currencies and bonds—especially when central bank independence is under threat and national debt is rising.

Throughout 2025, markets experienced bouts of anxiety as President Trump openly criticized Powell, labeling him “too late” and questioning his leadership of the central bank.

Guha noted, “We’ve believed that while markets are wary of threats to the Fed’s independence, they had grown used to aggressive rhetoric and would only react if there was clear, coordinated action. The subpoenas and Powell’s response could serve as that catalyst.”