When investors around the world woke up Monday to news that the U.S. Justice Department had subpoenaed the Federal Reserve in a criminal investigation, it rekindled fears about whether America was still the gold standard for investment.
The result was a return of what is dubbed a “Sell America” market, which first emerged last April after President Donald Trump's surprise tariff announcement.
Fed Chair Jerome Powell said the criminal probe was an intimidation tactic by the Trump administration because the president was frustrated by the central bank's independent decisions on interest rates and its refusal to comply with Trump’s demands for ultra-low rates.
Powell’s statement immediately set off alarms for investors and trading desks around the globe. The S&P 500 and Nasdaq opened slightly lower before ending the day slightly higher.
The yields on U.S. government bonds soared to the highest levels since September 2025, a sign of worry in the markets that a less independent Federal Reserve might not be able to control inflation. Yields for the 10-year Treasury, which mortgage rates closely track, rose above 4.2%, and the 30-year Treasury yield, which is often viewed as a barometer of future inflation, rose above 4.8%. Those declines largely faded by midafternoon, though.
The U.S. dollar also weakened against every major currency. As of 4 p.m. ET, the ICE U.S. dollar index, which measures the dollar’s performance against a basket of foreign currencies such as the euro, pound sterling and yen, was down 0.3%, nearly to its lowest level since early December.
A decline in the dollar directly makes it more expensive for U.S. companies to import products from overseas and for consumers to travel or study abroad. It also lowers the value of American exports, because products that are paid for in foreign currencies are worth less in dollars than they had been just a few days ago.
The rise in interest rates and the drop in the dollar also run directly counter to the administration’s recent affordability push.
"The Federal Reserve’s independence and the public’s perception of that independence are critical for economic performance, including achieving the goals Congress has set for the Federal Reserve of stable prices, maximum employment, and moderate long-term interest rates," former Fed chairs Ben Bernanke, Janet Yellen and Alan Greenspan said in a statement alongside several former Treasury secretaries.
“Powell has explicitly characterised this as an attack on the Fed’s independence from the Trump administration,” strategists at ING wrote in a client note Monday.
“The combined drop in the dollar, equities and Treasuries was a reminiscence of the ‘sell America’ days of last spring,” they said.
In April 2025, stocks fell precipitously and Treasury yields and precious metals soared after Trump’s “Liberation Day” tariff rollout.
Precious metals soared again Monday. The price of gold rose 2% and the price of silver rose more than 6.2%.
After that episode last spring, the credit rating agency Moody’s downgraded the United States’ credit rating but said that it maintained a “stable outlook” for America’s economy nonetheless.
“The U.S. retains exceptional credit strengths such as the size, resilience and dynamism of its economy and the role of the US dollar as global reserve currency,” Moody’s wrote in May. “In addition, while recent months have been characterized by a degree of policy uncertainty, we expect that the U.S. will continue its long history of very effective monetary policy led by an independent Federal Reserve.”
Eight months later, investors Monday were clearly signaling that the future of the Fed's independence was in question once again.
“The readiness to use criminal subpoenas to pressure the Fed will make it even harder for the next chair to convince markets and the public of his own technocratic independence, making it harder to control inflation and inflation expectations,” Krishna Guha of Evercore ISI wrote to clients Monday.
“We hope Bessent/Republicans in Congress will recognize this and find an off-ramp,” Guha said, referring to Treasury Secretary Scott Bessent.
Monday’s market moves also came amid a surprise rollout of Trump policy plans in recent days that target private industries.
On Wednesday, the president blindsided Wall Street when he posted on social media that he was “immediately taking steps to ban large institutional investors from buying more single-family homes.” Trump said he would discuss the issue further at the World Economic Forum gathering in Switzerland later this month.
While institutional investors own a very small percentage of homes nationwide, shares of firms such as Blackstone and Invitation Homes dropped sharply after Trump's post.
On Wednesday, Trump said he would not permit major defense companies to issue dividends or buy back their own stock, sending shares of those firms tumbling.
Yet just hours after the dividend post, Trump said he would request a massive increase to the U.S. annual defense budget, sending those same companies’ stocks soaring back up.
In a post on Thursday, Trump called for $200 billion in mortgage bond buying, which rocked the mortgage market but triggered sharp declines in typically slow-moving mortgage rates.
Over the weekend, the White House touted the declining mortgage rates as an example of how Trump's policies were making everyday life more affordable.
Monday’s increase in Treasury yields, however, could be a sign that those rates are about to rise again.
On Friday, Trump hit corporate America with another intervention, demanding that credit card issuers cap interest rates at 10% for one year. Banks balked at Trump’s request, saying through an industry lobbying group that a cap “would reduce credit availability and be devastating for millions of American families and small businesses.”
Trump on Sunday hit back at the companies. “We’re putting a one-year cap at 10% and that’s it,” he said on Air Force One. Trump said card companies would be “in violation of the law” if they did not comply.
It was unclear what legal mechanism Trump would use to force card issuers to lower their interest rates.
Shares of the country’s top credit card issuers plunged Monday. Capital One slid more than 6% as American Express dropped 4.2% and Citigroup dropped 3%.
Top banks, such as JPMorgan Chase, Bank of America and Wells Fargo, dipped around 1%.
Trump has also demanded that oil companies invest in Venezuela, after his administration removed Venezuelan President Nicolás Maduro from power on Jan. 3.
On Friday, in a roundtable at the White House, ExxonMobil CEO Darren Woods called Venezuela “uninvestable.” Trump threatened to retaliate against the oil giant over that remark.
“I didn’t like Exxon’s response,” Trump told reporters on Air Force One on Sunday night. Speaking about Venezuela’s oil, Trump said that “we have so many that want it” before adding that he would “be inclined to keep Exxon out.”
The operation to remove Maduro has whipsawed oil prices, which fell in the days after the Jan. 3 operation, but were up more than 3% for the year as of Monday afternoon.
