Federal Reserve Chairman Powell Faces Criminal Referral By House GOP

Central Bank

Summary:

House GOP refers Powell for alleged mismanagement amid Fed headquarters renovation.Financial markets watch Fed leadership's impact closely.Past leadership uncertainty has caused volatility in BTC and ETH.

Federal Reserve Chairman Jerome Powell has been criminally referred by a House GOP member aligned with Donald Trump, focusing on allegations of mismanagement of Fed headquarters renovations, according to a Fox News report from July 22.

The referral of Powell to the Department of Justice by Trump's ally holds potential implications for financial markets, although no immediate measurable impacts are confirmed at present.

Powell's DOJ Referral Could Jolt Financial Markets

Jerome Powell's criminal referral by a Republican House member, aligned with former President Donald Trump, cites alleged mismanagement of Federal Reserve renovations. According to CNBC, Russ Vought of the Office of Management and Budget investigated this matter, while Bill Pulte called for further Congressional scrutiny.

Federal Reserve's leadership under scrutiny can influence financial market stability, affecting key assets. Powell has denied claims during Congressional testimony regarding luxury expenditures, stating, "There's no VIP dining room...no new marble...no roof terrace gardens" (Congressional testimony). While mismanagement and associated bias allegations are raised, no decisive changes have been implemented.

Market analysts and industry participants are observing potential reactions, including the impact on U.S. Treasuries, the Dollar Index (DXY), and cryptocurrencies. Major tokens like BTC and ETH traditionally respond to U.S. leadership uncertainties and macroeconomic risks, though current reactions remain subdued.

Bitcoin Holds Steady Amid Federal Reserve Turmoil

Did you know? The House GOP's referral of Jerome Powell brings reminiscent echoes of Trump's 2019 intent to remove Powell, affecting assets such as BTC and DXY.

Bitcoin's current standing reflects broader trends in reaction to Federal Reserve news. Amid the unfolding Powell case, Bitcoin is priced at $117,739.79, boasting a market cap of $2.34 trillion and capturing 59.55% market dominance. Notably, the 24-hour volume surged by 38.69%, contrasted by a slight 0.79% price dip. Over 90 days, Bitcoin has shown a robust 29.70% appreciation, marking a steady rise.

Bitcoin(BTC), daily chart, screenshot on CoinMarketCap at 16:49 UTC on July 21, 2025. Source: CoinMarketCap

Insights by the Coincu research team suggest that the ongoing investigation could guide future governance frameworks at the Federal Reserve. Historical analyses show market volatility follows leadership instability, hinting at potential fluctuations in cryptocurrency valuations if uncertainty persists. Policymakers and industry observers await further developments in the Powell narrative.

Source: CryptoSlate

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Devin

Economic

Commodity

Crude oil and gasoline prices are under pressure today, with gasoline falling to a 2-week low. The outlook for larger crude exports from Iraq may boost global oil supplies and is weighing on prices. Expectations for increased Iraqi crude exports may also prompt Saudi Arabia to boost its crude exports in order to maintain its market share, further exacerbating a global oil supply glut. Losses in crude are limited due to a weaker dollar and today's rally in the S&P 500 to a new all-time high, which shows confidence in the economic outlook that is bullish for energy demand.

Weighing on crude is the outlook for Iraq to boost crude exports from its northern Kurdish region through the Iraq-Turkey pipeline, where oil exports have been halted since March 2023. The Iraqi government approved a plan for the semi-autonomous Kurdish region to resume oil exports. Kurdistan expects to supply Iraq's crude market with 230,000 bpd of crude once exports resume. Iraq is OPEC's second-biggest oil producer.

Crude prices have carryover support from last Friday when the European Union approved fresh sanctions on Russian crude exports and its energy trade over its war in Ukraine. The sanctions package includes cutting off 20 more Russian banks from the international payments system SWIFT, as well as restrictions imposed on Russian petroleum refined in other countries. A large oil refinery in India, part-owned by Russia's Rosneft PJSC, was also blacklisted. Additionally, 105 more ships in Russia's shadow fleet were sanctioned, bringing the total number above 400 ships.

Concern about a global oil glut is negative for crude prices. On July 5, OPEC+ agreed to raise its crude production by 548,000 barrels per day (bpd) beginning August 1, exceeding expectations of a 411,000 bpd increase. Saudi Arabia also stated that additional similar-sized increases in crude output could follow, which is viewed as a strategy to reduce oil prices and penalize overproducing OPEC+ members, such as Kazakhstan and Iraq. OPEC+ is boosting output to reverse the 2-year-long production cut, gradually restoring a total of 2.2 million bpd of production by September 2026. On May 31, OPEC+ agreed to a 411,000 bpd increase in crude production for July, following the same 411,000 bpd hike for June. June crude production rose +360,000 bpd to a 1.5-year high of 28.10 million bpd.

Source: Yahoo Finance

To stay updated on all economic events of today, please check out our Economic calendar

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Adam

Stocks

Under the surface of the US stock market’s march to record highs this month, there are signs the rally is running out of gas.

The S&P 500 Index has gone 17 sessions without a move of 1% in either direction, the longest stretch of relative tranquility since December. For Matt Maley at Miller Tabak & Co., the diminished movement shows the market’s momentum is waning after its scorching rebound from April’s tariff-fueled lows.

Amid a barrage of headlines about the Federal Reserve chair’s job security and President Donald Trump’s trade war over the past few weeks, investors appear to be tiring of waiting for more stocks to join the tech-led market surge, said Maley, the firm’s chief market strategist.

“Whenever a narrow rally losses steam, it usually signals that investors are starting to look for signs of a broader rally,” he said. “When they don’t get it, they tend to pull back for a while.”

It’s hard to blame them for retrenching at the moment, with earnings season just getting underway, trade negotiations in flux and expectations growing that the Fed is months away from potentially cutting interest rates.

As Aaron Nordvik at UBS Securities LLC sees it, the tailwinds that were driving shares higher are now easing, such as the stock market’s history of strength in July.

“I’ve been quite bullish for a while now, but most of the good news is now in the price,” said Nordvik, a macro equity strategist at the firm. While he says a sharp slump is unlikely, in his view the risk-reward profile for equities is less attractive than even just a couple weeks ago.

This week has the potential to stir up volatility. Two members of the so-called Magnificent Seven megacap tech stocks that powered the market higher in recent years are set to report results — Tesla Inc. and Google parent Alphabet Inc. The stakes will again be high for the cohort as Wall Street looks for an update on their spending plans, especially related to artificial intelligence.

Then comes the Fed’s July 30 policy decision. The central bank is widely expected to keep rates on hold. But all eyes will be on Chair Jerome Powell to see whether he’ll respond to Trump’s relentless pressure on him to cut borrowing costs, or reports that the president was on the brink of seeking to fire him.

Momentum Reading

For now, stocks are near an all-time high, sustained by a broad sense that the US economy is holding up in the face of the president’s tariffs, while inflation remains muted.

The are other indications of cooling momentum. Dan Greenhaus at Solus Alternative Asset Management points out that the share of S&P 500 members above their 20- or 50-day moving averages has declined lately, an indication the rally may be losing energy.

“But given the better-than-expected inflation and economic data — not to mention corporate commentary which thus far has been pretty good — I’m not sure I’d put too much stock in the technicals right now,” said the firm’s chief market strategist.

There’s also an argument that the ebbing turbulence — the market’s so-called fear gauge isn’t far above its lows for this year — is a reason for stocks to extend their gains.

“An old saying on Wall Street is, “Never short a dull market,’” said Dave Lutz, equity sales trader and macro strategist at Jonestrading. “History shows quiet markets tend to drift upward.”

Still, for investors waiting for a fresh catalyst to lure them back in, earnings season has yet to prove decisive. Company results have been solid. But this time the reaction has been muted, a worrisome hint that much of the good news is priced in to a market that’s at historically high levels with elevated valuations.

And while recent economic data supports the bullish case for stocks, Citigroup Inc. strategists say that much of that is also reflected in shares.

“The issue is the setup,” Scott Chronert, the firm’s head of US equity strategy, wrote Friday in a note. “It feels like the market is moving ahead of positive developments.”

Source: Bloomberg

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Daniel Carter

Central Bank

Economic

Key points:

● Twenty-three out of 27 economists see 200-bps cut.

● Four expect smaller cut of 100 bps.

● Economic slowdown, strong rouble help curb inflation.

Russia's central bank is expected to cut its key rate by 200 basis points (bps) to 18% on Friday because of falling inflation, an economic slowdown and the strength of the rouble, a Reuters poll of 27 economists showed on Monday.

Twenty-three said they anticipated a 200 bps cut, while four took a more cautious view, predicting the central bank would ease by 100 bps. It will announce its decision at 1030 GMT on July 25.

"The inflation data for June indicate that prices are rising more slowly than the regulator's forecast, providing grounds for reducing the key interest rate to 18% immediately," said Maxim Petronevich of Agricultural Bank.

Inflation calculated on an annualised basis fell to 9.4% in June from a peak of 10.34% in March - still far from the central bank's target of 4%, which it aims to achieve next year.

The bank hiked the key rate to 21%, its highest level since the early 2000s, last year, acknowledging that it had begun the tightening cycle too late and allowed inflation to get out of control.

It cut the key rate by 100 bps to 20% in June, for the first time in three years, but some analysts said the bank was likely to be cautious to avoid a repeat of last year's situation while inflation expectations remain high.

"The further easing of policy may be restrained by still high inflation expectations among economic agents and concerns about a repeat of the 2024 de-facto easing of monetary policy through excessive market optimism," Bank of St. Petersburg analysts wrote in a note.

They were referring to excessive lending by commercial banks in the overheated economy last year.

Anton Tabakh from Expert RA rating agency said he expected a warning from the central bank that the market should not be expecting 200 bps cuts at the next rate-setting meetings.

The bank currently predicts inflation of between 7% and 8% for 2025, and analysts expect it to adjust that forecast downward in light of the latest data.

The rouble has rallied by about 45% against the U.S. dollar this year, making imports cheaper. It strengthened by 0.6% to 78.25 against the dollar on Monday.

"The strong rouble exchange rate remains an important disinflationary factor," said MKB bank's Gleb Barabanov.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

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Adam

Economic

As we start a new week, the focus is once again on tariffs and earnings reports. The clock is ticking on the deadline for the US to reach trade agreements with the EU, Canada and Mexico. These are the US’s largest trading partners, and if their tariff rates surge to 35% for Canada and 30% for the EU and Mexico, then the limited impact of tariffs on economic growth so far may not last.

Financial markets have not been too worried about the tariff risks thus far. Boeing, which is expected to be a target of EU retaliatory tariffs, has seen its share price rise by 15% in the past month. The Eurostoxx 50 index fell slightly last week but is still higher by more than 2.5% in the past month, and there is no sign that the EU’s largest exporters are seeing their share prices hit by tariff threats. For example, over the last month, Ferrari, Pernod Ricard and Airbus, have seen their share prices rise by 8%, 6.5% and 14% respectively, defying tariff fears.

The latest news on tariffs is mixed. Over the weekend US Commerce Secretary, Howard Lutnick, said that he hoped a trade agreement would be reached between the US and the EU, but that the August 1st deadline was hard, although no previous deadline from the US has been that hard so far. Early on Monday the news was less positive, with reports suggesting that the new universal tariff on all EU goods will be above the current rate of 10% with fewer exemptions. Voices are also getting louder in the EU about retaliatory measures including new taxes on US tech giants, which could disrupt negotiations even further. Thus, after six consecutive months of gains for the euro, and EUR/USD higher by 12% so far this year, the risk is that negative trade headlines hit the euro as we lead up to the August 1st deadline. EUR/USD has come under pressure in the past week, and is testing the $1.1650 level this morning, if it fails to extend gains from here, then it could be a sign that sentiment is draining from the euro as we near the tariff deadline.

At the start of the new week, stocks are lower in Europe and US equity futures are higher. European and UK bond yields are lower across the curve, which could limit euro and pound upside if they continue, although the dollar is a key underperformer in the G10 FX space this morning. There are some drivers of markets this morning including news that 60 German companies have unveiled investment of at least EUR 100bn to boost Germany’s planned growth and development program. This is a coup for new Chancellor Friedrich Merz. This is designed to stop the outflow of investment that has plagued Germany in recent years. The hope is that this will boost growth in the economy. We doubt that today’s news will have a big impact on the Dax, as a lot of the good news is already priced in, the Dax is higher by 22% so far this year, and the domestically focused Mdax is higher by a similar amount. This is a big opportunity for some of Germany’s biggest companies, including Deutsche Bank, who could benefit from demand for alternatives to US banks.

There have been some key earnings announcements, including Stellantis, which reported a larger than expected loss this morning, as the impact of 25% tariffs on auto exports to the US starts to bite. While Stellantis has its own issues, including expensive restructuring costs, this could still be a warning sign for other European car manufacturers as we await their earnings, Volkswagen will release earnings at the end of this week. In contrast, Ryanair reported a strong set of figures in a sign that European travelers are shunning long haul in favour of short haul destinations this summer.

As we look to this week, there are a few key events that will drive markets. We choose the most impactful ones below.

ECB meeting: wait and see how tariff drama plays out

There is no expectation of a rate cut from the ECB this week, with the rate cutting cycle expected to start again later this year. There is currently more than 30 bps of cuts expected from the ECB by the end of this year. Current market pricing suggests that we are getting close to the end of this rate cutting cycle for the ECB, and we expect that the ECB will suggest that this is the case. For example, the ECB’s bank lending survey is released on Tuesday, and a rise in demand for mortgages could be a sign that monetary policy is now accommodative, The ECB will want to tread carefully at its meeting this week, because of the US tariff threat on August 1st. If tariffs are implemented on pharmaceutical exports, then this could hit Eurozone growth and demand more rate cuts than currently expected.

ECB members continue to lean towards dovish rhetoric, according to a Bloomberg central bank speak index, which has been emboldened by the disinflation process that continues in the Eurozone. Thus, we expect the ECB’s statement to acknowledge both progress on inflation and the risks from US tariffs. Due to the ECB’s wait and see mode, we do not expect this meeting to be too market moving.

Global PMI reports; green shoots expected for the UK

The early reading of July PMI reports are released this week. The UK figures will be watched closely as the UK desperately tries to search for growth. The survey data has been stronger than the real economic data over Q2, and we expect there to be some good news included in the July report. Signs that cost pressures are easing will be welcome news for the UK government. There could also be signs that the UK economy will grow at a faster rate in Q3 compared to Q2. The employment balance may temper optimism from this survey. There have been clear signs that the UK labor market is softening, and we expect this to be reflected in the July PMI report. If the report is stronger than expected, we could see a boost in the pound.

In Europe, the export orders component will be the focus. Overall, this index has been weak in 2025, as tariffs and a slowdown in the US economy bite. Thus, the Eurozone PMI could signal a muted start to Q3 growth.

3, Earnings reports: can tech prove that AI spend is paying off?

The reporting season will heat up this week, with Google and Tesla earnings the highlight. Overall, 100 S&P 500 companies will report earnings this week, and expectations are high after a solid start for earnings season, especially from US financials. Alphabet and Tesla will both report earnings on Wednesday evening, after US markets close. Analysts expect Google to report double digit earnings and revenue growth. Google could report stronger advertising spend, and crucially, for the stock price, signs that AI investments are starting to pay off, and AI monetization is boosting results in Google’s search business. Cloud is also an important part of the business, so these results will be watched closely. Cloud strength could come from more businesses adopting AI. Thus, we are moving into the monetization phase of AI, and Google will be a key litmus test for the tech sector. If its AI investments pay off, then it may ignite another rally in tech stocks, especially those with AI exposure.

Tesla will also report this week, Last quarter, Tesla reported a 20% drop in auto revenue, and the bar is low for Q2. The market expects a 20% drop in earnings YoY, although there is some confusion about Tesla earnings leading up to this report. There could be further weak sales, but Tesla is the ultimate growth stock, and if the earnings call presents a positive opportunity for the robotaxi revenue possibilities, and the company’s AI investments, then the stock could shine.

Tesla’s shares have tended to rise in recent quarters, even with earnings misses, and the average move in the share price 24 hours after an earnings report is 10%. The share price has been rising as we lead up to this report, and it is higher by nearly 4% in the past month. Thus, it may take a negative report to weigh on Tesla’s share price.

Source: xtb

To stay updated on all economic events of today, please check out our Economic calendar

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Thomas

Economic

Treasury Secretary Scott Bessent said Monday that implementing high tariff rates on countries starting August 1 "will put more pressure on those countries to come with better agreements."

Bessent's remarks suggest that he views President Donald Trump's planned massive tariffs on top trading partners — which have been postponed until Aug. 1 — as not so much a deadline to ink deals, but as another negotiating tactic to squeeze the impacted countries to acquiesce to favorable terms for the United States.

"We'll see what the president wants to do," Bessent said on CNBC when asked whether next month's deadline could be extended for countries that are engaging in productive talks, an idea that has been endorsed by administration officials in recent months.

"But again, if we somehow boomerang back ... I would think that a higher tariff level will put more pressure on those countries to come with better agreements," said Bessent.

Investors and importers appear torn between bracing for Trump's tariffs to actually take effect next month on one hand, and betting that Trump will postpone them yet again on the other.

The steep levies, some as high as 40%, could cripple both the U.S. economy and the economies of trading partners.

Bessent's remarks come as top Trump administration officials have insisted in recent days that Aug. 1 is a "hard deadline."

Commerce Secretary Howard Lutnick, for instance, said Sunday that "nothing stops countries from talking to us after August 1, but they're going to start paying the tariffs on August 1."

Bessent also said that "our trading partners were told that the rates could boomerang back toward the April 2 levels."

"We can continue talking then, but again, we're proceeding apace with the negotiations, but we're not going to rush for the sake of doing deals."

Trump's tariff deadline has shifted a number of times since his April 2 announcement imposing steep levies on trading partners, casting doubt on whether the Aug. 1 deadline will hold, or if it's viewed within the administration as another tool to get trading partners to the negotiating table.

In another sign that Bessent views Aug. 1 tariffs, once imposed, as another negotiating tool, he said Monday that the administration is "more concerned with high quality" trade deals, than getting deals done by August 1.

"The important thing here is the quality of the deal, not the timing of the deals," Bessent said.

Source: CNBC

To stay updated on all economic events of today, please check out our Economic calendar

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Adam

Forex

The US Dollar has started to show some signs of relative weakness after an almost flawless beginning to July.

Between a rebirth in Tariff talks, extended until the 1st of August and some general volatility in global Geopolitics, there has been some sell-side covering for the Greenback.The rally has (at least for now) concluded through last week's bout of Middle East tensions (with intense Syrian local conflicts), encouraging PPI Data and FED's Waller starting the Blackout Period from the US Central Bank with some repeating of his dovish comments.For those who haven't seen the headlines, Japan's Prime Minister and his electorate have lost the majority which has created some movement in JGBs (Japanese Governement Bonds) and led to a strengthening of the Yen (with Japan markets off today) – Another contributor of a weaker dollar to start the week – USDJPY is down close to 1% on the session.

Markets were also concerned by talks around Jerome Powell, whose term finishes in May 2026, getting fired from his FED Chair role – US Treasury's Scott Bessent has denied such outcomes, however markets had still sold off some treasuries which trickled to the Dollar on the last weekly close – Any possibility has to get priced in!Let's take a look at what technicals indicate to spot potential trends for this starting week.

Dollar Index Technical update

Dollar Index 1H Chart

Dollar Index 1H Chart, July 21, 2025

The Dollar came shy of the 99.00 psychological handle – A failure to breach that landmark has been seen as a sign of weakness despite a solid July tenure and some testing of higher levels through risk-off spikes.Failed patterns and breaks are the best signs for reversals, and the last spike on Thursday to form a double-top was a good example for this.Since, the Index is down close to 1 full handle, with prices consolidating in the 98.00 Pivot Zone (+20 pips) and currently breaking the psychological level.Sellers are taking the momentum, as they are currently pushing through the 97.98 overnight lows pursuing the break-retest of the July Channel.Watch for other currency pairs and assets how this dynamic trickles – Gold is also up 1.10% on the session and close to $3,400.

Stepping back to the 4H Chart

Dollar Index 4H Chart, July 21, 2025

There is a move down ongoing, which gets also reflected in the 4H RSI trading below its neutral zone (neutral is typically close to the middle line).There has been a golden cross between the 50 and 200 MAs on Friday which led to some bull candles, however such technical patterns can come late and have done just that.Buyers will look at the 97.60 Support Zone (+/-10 pips) to show some presence – Selling outflows from the US are still potentially massive with the short-term positioning having became more neutral in the past two weeks – Still, the week is young and markets will have to slow down a bit towards next week as they will prepare for the July 31st FED Meeting.