A sane market would be going crazy right now.

 This weekend alone, we saw the administration threatening to bring criminal charges against the chair of the Federal Reserve, and we edged closer to a military conflict with a NATO country. Those were not the only big and worrying developments over the past few days, nor was the week being ended by any stretch of the imagination quiet.



This isn’t to say that the market hasn’t reacted to bad news previously during the current administration. There have certainly been cases where a disastrous policy announcement has caused things to drop, but always with remarkable speed, investors have reverted back to the “this is fine” mode, even if the problem they were reacting to has by no means gone away.

We'll see how things play out over the next few days, if Trump again backs down again (which will be somewhat difficult now that the wheels are in motion) and whether or not the markets decide this is finally a time for a flight to safety and the bond vigilantes actually get serious. 

POWELL: “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.” youtu.be/KckGHaBLSn4

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— Carl Quintanilla (@carlquintanilla.bsky.social) January 11, 2026 at 5:01 PM

Tillis is spot on. The Senate can't confirm a Trump toady to succeed Powell at the Fed. The rest of the game is now out in the open, and it doesn't end well.

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— Justin Wolfers (@justinwolfers.bsky.social) January 11, 2026 at 6:00 PM

What can history teach us about what happens when a populist strongman with an idiosyncratic taste for low interest rates undermines central bank independence?

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— Justin Wolfers (@justinwolfers.bsky.social) January 11, 2026 at 5:44 PM