THE DAY AMERICA’S CENTRAL BANK DIED (AND NO ONE IN D.C. SEEMS OUTRAGED)

THE DAY AMERICA’S CENTRAL BANK DIED (AND NO ONE IN D.C. SEEMS OUTRAGED)

The Jack Hopkins Now Newsletter #729: Monday, January 12th, 2026

Why the criminal probe of Jerome Powell is the most dangerous political escalation in generations-and the tectonic instability it is about to unleash

On Sunday January 11, 2026, something happened that should have turned the nation upside down. Not on Wall Street necessarily…but in the cerebral cortex of every citizen who actually understands…what holds economies and democracies together.

Federal prosecutors…not some fringe zealots…but the actual Department of Justice… opened a criminal investigation into Jerome H. Powell, the Chair of the Federal Reserve.

A man whose entire job, by law and by design…is to steer the nation’s monetary policy independent of political whims. This wasn’t about a parking violation or paperwork.

It was about Powell’s testimony to Congress concerning a renovation of the Fed’s headquarters…a $2.5 billion project that doesn’t even cost taxpayers a dime.

And yet, prosecutors threatened a criminal indictment over whether Powell “misled” lawmakers about the scope of that renovation.

If you feel that your gut just tightened…good. That’s your brain reacting to what history will remember as a turning point.

The Fed Was Created to Be Independent-Not a Political Minion

Let’s make the stakes clear:

The Federal Reserve wasn’t created as an arm of whatever political faction happens to occupy the White House.

It wasn’t designed as a subsidiary of the executive branch. It was created in 1913 specifically…structurally and legally…to insulate monetary policy from daily political pressures.

That insulation is the bedrock of market confidence in the U.S. dollar…in Treasury securities…in interest rates…in inflation control…and in credit availability.

This is the invisible architecture that keeps financial systems…American and global… from collapsing into chaos.

So when the Federal Reserve Chair faces federal subpoenas and threats of criminal prosecution…not for obvious corruption or stealing money…but for how he described a renovation project…that is not merely a news item. That is not merely politics as usual.

That is an assault on one of the last true institutional checks on raw political power.

Powell Says It’s a Pretext-and Watch That Word

Powell himself didn’t dance around this.

In a rare…direct address…he said the investigation was not about the renovation or the testimony itself…but a pretext to pressure the Federal Reserve into bending its core function: setting interest rates based on economic reality…not political pressure.

Powell’s quote is worth zeroing in on, because it’s going to be understood as prophetic:

“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President.”

When the Fed participates in politics like a legislative committee…that’s one thing.
When the Justice Department threatens legal action against the chair to manipulate monetary policy…that’s an entirely different order of crisis.

This is institutional intimidation on a structural level.

Think About What That Means in Plain English

Let’s strip away all the Washington euphemisms:

• The DOJ threatens to indict the head of an independent agency…

• For doing his job in a way the political power structure doesn’t like…

• Based on a pretext that has nothing to do with actual corruption or stealing money…

• And everything to do with coercing him into aligning monetary policy with political demands.

That’s not law enforcement.
That’s political enforcement.

And that’s authoritarian. Plain and simple.

Markets Have Already Responded-And They Don’t Do Politics for Fun

Gold spiked.
The dollar wavered.
Stocks dipped.
Why?

Because markets instinctively understand the Fed is the last anchor of credibility in an economic world racked by debt…inflation risk…geopolitical conflict…and uncertain growth.

When a central bank looks like it can be manipulated like a regular executive agency… investors begin to price in political instability…not economic stability.

Markets don’t like uncertainty.
They hate politicization.
And they absolutely fear institutional breakdown.

This Isn’t About the Renovation-It’s About Power

Let’s pause for a moment and talk about the renovation itself:

Yes, the Fed is renovating its headquarters. The cost rose to about $2.5 billion…a project funded by the Fed’s own revenue…not taxpayer dollars.

Some Republicans…including Rep. Anna Paulina Luna…had previously pushed a referral to the DOJ…accusing Powell of perjury in testimony where he denied certain luxury features in the renovation plans.

But this current DOJ escalation goes far beyond that referral.

This is not a congressional referral.
This is not an oversight hearing.

This is criminal investigation leverage used on the top economic official precisely because he refused to bend monetary policy to presidential wishes.

In other words: it’s weaponized law enforcement.

And It’s Not Just Powell-It’s a Pattern

This is part of a broader pattern:

Lawyers…prosecutors…and political appointees aligned with the current administration have pursued legal actions…or investigations against high-profile figures who didn’t comply…capitulate…or fall in line politically…from the former FBI Director to state attorneys general to senators.

Some have been unsuccessful in court or quashed by judges.

But this crosses a different boundary.
This isn’t about election politics.
This isn’t about campaign rhetoric.
This is about the integrity of the economic system itself.

The Framers Understood This Risk-That’s Why the Fed Is Independent

Look at history:

The only periods where central bank independence was compromised…such as under Nixon in the early 1970s…are now studied as cautionary tales of political meddling leading to inflation and loss of confidence.

When government officials attack the central banker…for not bending monetary policy to political desires…you don’t just get short-term rate shifts.

You get:

• Inflationary pressure

• Currency devaluation

• Global investors losing faith

• Higher borrowing costs

• Asset bubbles and systemic risk

If Powell can be threatened with indictment for doing his job…then no official with statutory independence is safe. Not the Fed. Not inspectors general. Not special counsels. Not anybody.

This is not accidental. It’s strategic.

It’s intentional.

And…it’s destabilizing.

The Imminent Catastrophic Consequences

Let’s talk truth…not punditry:

1. Market Instability Will Worsen

When institutions that are supposed to be apolitical become political weapons, markets don’t say, “That’s interesting.”

They say: Risk now has a political premium.
The dollar weakens. Bonds get dumped. Safe assets get bid up. Volatility spikes.

We are already seeing that.

This rattles pensions…mortgage rates…job creation…retirement portfolios…everything tied to confidence in economic backing.

2. The Fed’s Independence Is Dead-Or on Life Support

A central bank that can be coerced by threat of criminal prosecution is no longer independent.

Once that door is opened…every subsequent White House…Republican or Democrat…will reserve the right to do the same.

Institutional separation of powers?
Gone.

Checks and balances?
Eroded.

Rule of law?
Contextual.

3. Investors Will Demand Higher Risk Premiums

That’s fancy speak for:

Everything costs more. Mortgages…business loans…credit cards…you name it.
Financial chaos isn’t just a Wall Street buzzword…it trickles down into Main Street reality.

4. The Dollar’s Global Reserve Status Is at Risk

Foreign governments don’t hold dollars because Washington is stable.
They hold them because the Fed is independent.

If that independence is compromised…watch foreign holders shift assets to gold…other currencies…crypto…whatever holds value outside U.S. political interference.

That’s not speculation…that’s what markets already price in when confidence collapses.

Worst of All-This Is a Precedent for Political Weaponization of Law

Let’s make a moral point:

If law enforcement becomes a tool used not to enforce justice…but to enforce political compliance…then we have crossed from constitutional democracy into political coercion.

This is not “just politics” anymore.

This is structural authoritarianism…disguised as legal process.

And it will not stop with Powell.

What Happens Next Will Define the Next Decade

We are at a fork in the road:

Will America remain a republic governed by rule of law and institutional independence?

Or…will every independent official…from economists to regulators to inspectors general…face the threat of legal retaliation if they disagree with elected power?

This moment is beyond politics…it is civilizational.

A society where enforcing political compliance under color of law is normalized…is not a healthy society…it is a captured one.

The People Will Have to Decide-Because the Institutions Won’t Save Them

When the institutions designed to protect liberty…are themselves threatened…then only the people’s outrage…vigilance…and engagement can restore balance.

This is not a drill.
This is not a fringe opinion.
This is the front page of America’s constitutional crisis.

What happens next…in markets…in Congress…in the courts…will likely echo for decades.

The criminal probe of Jerome Powell is not about a renovation project.
It is about power.

It is about control.

It is about the fundamental integrity of the institutions that make America more than just another political banana republic.

And…if we…the electorate…the voters…the informed citizens…don’t stand up and reclaim this moment…then the instability set in motion with the threats to Jerome Powell…will become the defining economic and political rupture of our time.

Now… Here’s Why YOU, on a Personal Level, Should Take a Deep Breath

Now pause.

Not because this isn’t serious.
Not because the danger isn’t real.

But because panic is exactly what moments like this are designed to trigger…and panic is how ordinary people get crushed while power players maneuver above them.

Here’s the truth most headlines won’t tell you:

You, personally…are not powerless in this moment.
And…you are not required to emotionally absorb the full weight of a systemic crisis all at once.

History doesn’t collapse overnight. It frays. It stretches. It tests. And then…sometimes …it snaps.

But between those phases…there is time. Time to think. Time to prepare. Time to refuse being psychologically stampeded.

The people who benefit from instability…want you dysregulated. Fearful. Reacting instead of observing.

Because a calm mind sees patterns. A regulated nervous system notices leverage. A steady citizen…does not become easy prey for bad actors…bad narratives…or bad decisions.

So take a breath…not to disengage, but to orient.

This is not the moment to make rash financial decisions…torch relationships…doomscroll yourself into paralysis…or catastrophize tomorrow before it arrives. It is not.

It is the moment to stay informed…stay connected…and stay mentally sovereign.

Crises separate those who surrender agency…from those who quietly increase it.

You don’t need to solve America today.
You don’t need to carry the Fed on your back.
You don’t need to emotionally relive every historical collapse you’ve ever read about.

You need clarity.
You need steadiness.
You need to remain a thinking participant…not a frightened spectator.

That’s how people endure unstable eras…and outlast them.

And make no mistake: this chapter is still being written.

#HoldFast

Back soon,

-Jack

Jack Hopkins