The U.S. Justice Department has launched a criminal investigation into Federal Reserve Chair Jay Powell over a $2.5bn renovation of the Fed's headquarters. Powell denounced the move as a political attempt to undermine the central bank's independence, linking it to his refusal to sharply cut interest rates as demanded by President Trump. Markets reacted nervously to the perceived threat to the Fed's autonomy, which is crucial for investor confidence and inflation control. Gold surged to a record $4,600 per ounce, reflecting a flight to safety, while the dollar fell and Treasury yields rose slightly, as investors began pricing in higher inflation risks. The S&P 500 futures dipped 0.7% amid heightened uncertainty.