Open War: Trump Targets the Fed |Macro Mondays: January 12, 2026

Macro Monday: Federal Reserve Subpoena, Trump Administration Policies & Market Implications - A Detailed Summary

Key Concepts:

• State Capitalism: Government control and direction of economic activity, often through strategic investments and interventions.
• Decoupling: Investment theme focused on divergence between US and Chinese economies.
• Lame Duck Committee: A committee with limited power due to impending changes in membership (e.g., nearing the end of a chairman’s term).
• Rotational Style Mix: A shift in market leadership from growth stocks (technology) to value stocks (small caps, energy, banks).
• QE (Quantitative Easing): A monetary policy where a central bank purchases government bonds or other assets to increase the money supply and lower interest rates.
• Subpoena: A legal document compelling someone to appear in court or provide evidence.
• Grand Jury: A group of citizens empowered to decide whether there is enough evidence to bring criminal charges.

I. Federal Reserve Subpoena & Political Pressure

The broadcast centers around the bombshell news of a grand jury subpoena served to the Federal Reserve, followed by a video statement from J. Powell. Powell framed the situation as a defense of the Fed’s independence, asserting the right to set interest rates based on economic conditions, not political pressure. He emphasized his commitment to price stability and maximum employment, regardless of administration.

Quote: “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.” – J. Powell

Andreasino noted the unprecedented nature of the Department of Justice’s involvement and the Fed’s public response, calling it an “open state of war” between the Trump administration and the Fed. He highlighted that while administrations often pressure the Fed, using the DOJ is a new tactic. Miguel observed this situation is reminiscent of third-world countries, but the fact that Powell publicly responded suggests some checks and balances remain.

The discussion questioned Trump’s motivation for this action, suggesting it’s a desperate attempt to influence the economy before the midterms, despite Powell’s term ending soon. The prevailing view is that Trump aims to create maximum pressure on the Fed, potentially forcing rate cuts before his departure.

II. Market Reaction & Investment Implications

Despite the gravity of the situation, the initial market reaction was surprisingly muted – a slight steepening of the yield curve (around 3-4 basis points). The market appears to be pricing in a scenario where the Fed won’t move until Powell is replaced. Gold and silver saw more significant gains, reflecting a flight to safety.

Andreasino believes this situation is fundamentally negative for the US dollar. He suggests investment plays include:

• Gold: A “no-brainer” due to increasing demand from the global south and potential diversification by G10 central banks.
• Silver: Less clear-cut than gold, as it’s not currently a monetary metal.
• Bitcoin/Crypto: A potential beneficiary if this situation triggers renewed momentum in the crypto space, as it’s less subscribed to than gold and silver.
• Foreign Exchange (FX): Direct plays against the US dollar.

Miguel highlighted the Real Vision model portfolio’s thematic allocation, which is currently performing well (up close to 10%). Key themes include:

• Decoupling: Benefiting from US-China divergence.
• Metals (Gold & Copper): Providing debasement protection.
• AI & Grid Investments: Capitalizing on the demand for electricity and infrastructure to support AI growth.

III. Trump Administration’s Economic Policies & State Capitalism

The discussion shifted to the Trump administration’s broader economic policies, including a proposed one-year cap on credit card interest rates at 10% and increased military procurement. Andreasino characterized these actions as a move towards “state capitalism,” where the government actively directs economic activity.

He pointed out the contradiction of increasing military spending while simultaneously capping credit card rates. He argued that price controls can limit supply and distort markets, but acknowledged the current credit card interest rates may not be a fair market price.

Quote: “If you had told me 12 months ago that we posted a record inflow into US assets from foreigners in 2024, I would have probably said, 'Ah, that's a bit of an exaggeration.' But here we are…” – Andreasino

Miguel believes Trump’s actions are primarily driven by the midterms and a desire to boost the economy and stock market.

IV. Emerging Market Rotation & Economic Outlook

Andreasino identified an emerging rotation in the stock market, with small caps outperforming large caps, and early signs of recovery in energy and banking sectors. This suggests an improving economic cycle. He believes the market hasn’t fully priced in a potential economic recovery, creating opportunities.

Both speakers anticipate benign inflation data and weak jobs data in the coming months, potentially reinforcing the Fed’s current stance. Miguel forecasts a benign inflation report tomorrow.

V. Iran Situation & Investment Opportunities

Miguel briefly addressed the escalating situation in Iran, describing it as a “pre-revolutionary state.” He fears the US may be walking into a trap set by the Iranian government. However, he sees potential investment opportunities in a future reopening of the Iranian economy, particularly in sectors requiring rebuilding.

VI. Listener Question & Closing Remarks

A listener question playfully inquired about Andreasino’s use of a running machine in the background. Andreasino admitted it was purely for aesthetic purposes, highlighting the show’s focus on presenting a polished image.

The broadcast concluded with a reiteration of the importance of monitoring developments on Real Vision and a thank you to the audience.

Data & Statistics Mentioned:

• Real Vision Model Portfolio Performance: Up close to 10% (as of the broadcast date).
• Yield Curve Steepening: 3-4 basis points.
• Fed Funds Pricing: 9-10 basis points priced for the next three meetings.
• Record Inflow into US Assets: Record inflow from foreigners in 2024.
• AI Productivity Growth: Close to 5%.

Logical Connections:

The discussion flowed logically from the immediate shock of the Fed subpoena to its broader implications for market sentiment, investment strategies, and the Trump administration’s economic policies. The analysis of Iran and the playful listener question provided brief diversions before returning to the central themes. The connection between Trump’s actions and the midterms was a recurring motif, framing the urgency of his policies.

Synthesis/Conclusion:

The broadcast painted a picture of a highly volatile and politically charged environment. The Trump administration is aggressively pushing the boundaries of its power, creating uncertainty around the Federal Reserve’s independence and the future of US economic policy. Despite this uncertainty, Andreasino and Miguel identified potential investment opportunities in gold, silver, Bitcoin, and thematic areas like AI and grid infrastructure. The overarching takeaway is that “state capitalism” is becoming a dominant force in the global economy, and investors must adapt to this new reality.