Recently, an interesting story has come up, and it seems there is quite a bit of legal tension between the Federal Reserve and the U.S. Department of Justice.

The Fed is contesting a subpoena from the Justice Department related to a criminal investigation of Chairman Jerome Powell, arguing against it in a closed court. The focus appears to be whether there were false statements about a building renovation project during last summer’s congressional testimony.

Chairman Powell himself claims that this investigation is a “pretext” to counteract pressure from former President Trump to lower interest rates. In other words, he sees it as a political move aimed at undermining the Fed’s independence.

When such legal battles continue, they can subtly influence market sentiment. There’s a concern that Jerome Powell’s policy decisions might be swayed by political pressure, creating uncertainty. Since this is a situation questioning the transparency and independence of monetary policy, it could impact overall market psychology, including the virtual asset markets.

The conflict between the Fed and the Justice Department is not just a legal issue but, in my personal view, a matter that concerns the very trustworthiness of the U.S. financial system itself.