Federal Reserve Chairman Powell faces the risk of missing the hearing, and the independence of the Federal Reserve is undergoing an unprecedented test.

Federal Reserve Chair Powell may miss the congressional hearing scheduled for February. According to the latest news, the U.S. Department of Justice has served a subpoena to the Federal Reserve, threatening to bring criminal charges against Powell. House Financial Services Committee Chair and Republican Congressman French Hill expects Powell will not attend, citing allegations of perjury before a grand jury. Behind this incident reflects an unprecedented systemic threat to the independence of the Federal Reserve.

The core of the event: Why Powell is subpoenaed

According to the latest reports, the DOJ’s investigation into Powell stems from two key issues. First, the authenticity and credibility of Powell’s congressional testimony in June 2025. Second, a deeper reason is that Powell refused Trump’s demand for rate cuts, insisting that the Fed’s interest rate decisions are based on economic assessments rather than political will.

Powell himself explicitly stated in response that the potential criminal charges are because the Fed’s interest rates are based on economic evaluations, not political intentions. He emphasized that the Fed’s rate decisions should continue to be evidence-based rather than yielding to political influence and coercion.

Political implications of missing the hearing

According to amendments to the relevant laws governing the Federal Reserve in 1978, the Fed chair is required to testify twice a year before Congress, offering views on monetary policy and economic conditions. This institutional design is itself a check on the Fed’s power and an important mechanism to ensure its independence.

If Powell misses the hearing due to criminal investigation threats, it will send a concerning signal:

• The Fed chair’s attendance is being used as political leverage
• Judicial procedures are being used to pressure Fed decision-making
• The independence of the Fed is being undermined at the systemic level

This not only affects Powell personally but also involves the foundational power of the Fed as an independent institution.

Market reactions are already evident

Market responses to this event are already clear. According to reports, after the DOJ’s subpoena news was released:

• The US dollar index rapidly declined
• International gold prices surged to a record high above $4,600 per ounce
• Bitcoin experienced volatility, falling back from above $92,000
• Risk assets like XRP also came under pressure and retreated

The underlying logic behind these reactions is consistent: market concerns over the Fed’s independence. If the Fed loses independence, the credibility of the dollar will be questioned, prompting investors to seek safe-haven assets (like gold) and alternative stores of value (like Bitcoin).

Deep risks: signs of systemic breakdown

Analysis suggests that this incident conceals systemic risks that cannot be ignored. If judicial procedures can be used to threaten the Fed chair’s policy decisions, then:

1. The Fed’s independence will become optional, not guaranteed
2. Monetary policy will become more politicized
3. Confidence in the US dollar and the US financial system will be eroded

Analysts at ING Bank pointed out that this move reignites market fears over the Fed’s independence, potentially triggering a “sell US assets” trend—investors selling dollar-denominated assets and seeking alternatives.

Key issues to watch moving forward

• Will Powell actually miss the February hearing?
• Progress and final conclusions of the DOJ investigation
• How Congress will respond to this incident
• Whether there will be internal power shifts within the Fed

Summary

The possibility of Powell missing the hearing reflects not just a personal issue but a systemic crisis in the independence of the Fed. When judicial procedures are used to pressure policy decisions, the system of checks and balances is already broken. The market’s reaction—dollar depreciation and gold rising—indicates that investors have recognized this risk. The key going forward is whether the Fed’s independence can be maintained under political pressure and whether Congress will act to safeguard this critical institutional arrangement.