Federal Reserve Chair Jerome Powell disclosed on Sunday that the Justice Department is threatening to indict him, a move that has drawn widespread condemnation.
In a Reuters interview on Wednesday, President Donald Trump stated he does not plan to fire Powell. He also indicated he may delay intervention in Iran, describing his approach as "wait and see." A human rights agency reports over 2,000 people have been killed in Iran.
The United States seized another tanker linked to Venezuela shortly before Trump met with Venezuelan opposition leader Maria Corina Machado. Machado presented Trump with her recently awarded Nobel Peace Prize.
Brent crude oil prices surged 9% through Wednesday to a three-month high above $66 per barrel, then fell below $64 following Trump's comments on Iran. A large supply glut continues to create a risky environment for crude investors.
Gold prices retreated after reaching a record high of $4,642.72 per ounce on Wednesday. Central bank demand and safe-haven buying may support further price increases this year.
The Japanese yen dropped to an 18-month low near 160 per dollar on Wednesday before recovering. Japanese Finance Minister Satsuki Katayama mentioned the possibility of joint intervention with the United States to support the currency.
The main U.S. dollar index is strengthening this week despite political turmoil. The dollar fell 7% in 2025 after a nearly 50% rise over the previous 15 years.
The December Consumer Price Index released on Tuesday showed a slightly softer-than-expected annual increase in core prices. Inflation may be stronger than the data suggests.
Major U.S. stock indices are set to end the week higher. Mixed bank earnings and a mid-week tech sell-off were offset by strong results from Taiwanese AI chip maker TSMC. The U.S. and Taiwan agreed on a trade deal Thursday that reduces tariffs on many Taiwanese exports.
U.S. stocks have largely ignored Trump's unorthodox policies, similar to 2025, except for post-"Liberation Day" disruptions. Trump is increasingly acting as a market activist.