Fed Independence Concerns Weigh on Treasuries and Greenback, But Send Precious Metals to Records: Jan. 12, 2026

A DOJ investigation opened into Fed Chair Powell over the weekend is sparking interest in central bank independence, or debasement trades as investors perceive that he’s being targeted by the White House in light of his reluctance to lower rates significantly. Meanwhile, President Trump this morning attempted to distance himself from the situation by stating that “he doesn’t know anything about it.” The commander in chief’s efforts to detach from the probe led traders to buy the deep morning dip in stocks and bring equities into modest gains before noon on the eve of a high-impact CPI print tomorrow prior to the opening bell. Still, there’s glimpses of the “Sell America” trade that we saw in the first half of last year featuring the rare combination of yields rising as the greenback drops. Also, commodities are rallying strongly in response to expectations of potentially looser monetary policy, with store-of-value precious metals like silver and gold especially outperforming and reaching fresh records. Bitcoin and forecast contracts are additionally experiencing engagement but volatility protection instruments are seeing higher prices as participants brace for potential turbulence by adding portfolio hedges.

CPI Estimates Are All Over the Place

In light of the debasement positioning that is gripping markets today, tomorrow’s December Consumer Price Index (CPI) is critical because it could meaningfully impact financial assets. It’s precisely the wide range of possible outcomes that is especially noteworthy. Of the 41 professional forecasters surveyed by Reuters in its monthly poll, the minimum and maximum projections sit at 2.5% and 2.9%. The sharp discrepancy concerning an indicator that is typically well telegraphed by Wall Street is emblematic of the adverse impacts of the government shutdown, which led the Bureau of Labor Statistics to use a controversial carry-forward data technique which most likely reflected lower-than-actual costs for shelter and drove a huge miss in November’s report. How these heavily weighted numbers are adjusted for the incoming publication is top of mind for economists and the potential answer to that question is what’s informing expectations as low as in the mid 2s or at almost 3%. The results’ influence on upcoming monetary policy decisions will also be pivotal, as lighter stats play to the hands of the doves and the President, while bulkier figures embolden the hawks on the other side.

International Roundup

Aussie Shoppers Spend More than Expected

Higher borrowing costs and inflation in Australia didn’t dampen consumers’ outlays in November with household spending climbing 1% month over month (m/m) and 6.3% and year over year (y/y), according to the country’s Bureau of Statistics. A consensus of economists predicted a 0.6% m/m jump following October’s monthly and yearly gains of 1.4% and 5.7%. Relative to the preceding month, furnishings and household equipment led, jumping 2.2%. Clothing and footwear followed with a 2% gain while recreation and culture was up 1.7%. Compared to the year ago period, cashiers rang up 10.6% more for miscellaneous goods and services. The recreation and culture category, furthermore, grew 8.6%. Overall services climbed 7.8% y/y. The Reserve Bank of Australia’s (RBA) key rate is at 3.6%, the lowest level since early 2023, but RBA Deputy Governor Andrew Hauser recently opined that inflation is excessive and that as a result, the organization is probably done with its easing cycle.