
Today’s letter is brought to you by MoonPay!Join over 30 million users who trust MoonPay as their universal crypto account.We make it easy to buy and sell crypto in over 180 countries, with no-to-low fees and all your favourite payment methods like Venmo, PayPal, Apple Pay, card and more.MoonPay is the only account you need in the DeFi ecosystem. Trade, stake and build your portfolio all in one place.Start now and get zero MoonPay fees* on your first transaction.To investors,News broke last night that the Department of Justice has opened an investigation into Federal Reserve Chairman Jerome Powell over comments he made while testifying about renovations to the Federal Reserve building.This development comes after months of disagreement about monetary policy between the Trump administration and the Federal Reserve. Before we get into what is likely to happen with this investigation and how it will impact the market, I want to remind everyone of the context.Background on Powell’s previous commentsThe investigation centers on whether Powell made false or misleading statements to Congress during his testimony before the Senate Banking Committee in June 2025. This testimony addressed the Federal Reserve’s ongoing multi-year renovation project for its headquarters buildings in Washington, D.C., which is estimated to cost around $2.5 billion and has experienced significant cost overruns (reportedly around $600-700 million).Key points of contention include:* Powell allegedly denied or downplayed the inclusion of certain luxury or non-essential features in the final project plans, such as private elevators, premium marble, water features/fountains, a VIP dining room, a rooftop terrace garden, and other upgrades.* These features appeared in earlier project documents submitted to bodies like the National Capital Planning Commission, but Powell stated during testimony that many had been removed or were not part of the current scope, attributing cost increases to factors like inflation in materials/labor, asbestos removal, soil contamination, and accessibility requirements.* Critics (including some Republican lawmakers and Trump administration figures) claim these statements were inaccurate or deceptive, potentially constituting perjury or false statements to Congress.The probe announced last night involves analyzing Powell’s public statements (including the congressional testimony), reviewing spending records, and other documents related to the renovation.An important point is that the renovation was reportedly approved in November 2025 by U.S. Attorney Jeanine Pirro (a Trump appointee). Prosecutors have contacted Powell’s staff for documents, and on Friday, January 9, 2026, the DOJ served the Federal Reserve with grand jury subpoenas threatening a potential criminal indictment tied to the June testimony.Powell’s responseAfter the New York Times broke the story of the investigation, Jerome Powell released a video message defending his actions and calling into question the motivation behind the investigation. Powell said:“This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings… Those are pretexts. 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.”There are a few takeaways I had from this response. First, Powell posted a video response to the allegations within minutes of the New York Times report being published. That seems highly suspicious. It takes time to create a script, record a video, edit the video, and get it posted online. The Federal Reserve is not exactly known as a world class content creator, so my guess is that the Fed or Powell are the ones who leaked the investigation to the media.There is nothing wrong with that decision per se, but it does beg the question of why would the Fed or Powell want to create a flame war in the public eye? I don’t know the answer. I suspect we will get answers later that provide clarity in hindsight.Second, the response seemed much more focused on the argument “this is political!” than denying the allegations. I have learned over time that the more some
Podzilla Summary coming soon
Sign up to get notified when the full AI-powered summary is ready.
Free forever for up to 3 podcasts. No credit card required.

These AI Agents Want To Help You Make Money

My 10 Takeaways From Bitcoin Investor Week

Introducing The World's First Publicly Traded Agentic Finance Firm

The Three-Headed Deflation Monster: Tariffs, AI, and Robotics
Free AI-powered recaps of The Pomp Letter and your other favorite podcasts, delivered to your inbox.
Free forever for up to 3 podcasts. No credit card required.