Fed's Independence Challenged Yet Again – North American Session Market Wrap for January 12

[Ben Graham]

Log in to today's North American session Market wrap for January 12

Traders and investors woke up to another piece of bad news – the Trump Administration and the US Department of Justice orchestrated yet another attack on Federal Reserve Chair Powell.

The pretext? Misleading statements in his testimony at the Senate (legal requirement for all Federal Reserve Members).

The real pretext? Finding new ways to fire the head of the US Central Bank just ahead of the upcoming FOMC – Another attack on the Fed.

And Jerome Powell responded fearlessly this time. I invite you all to listen to his (short) speech.

The problem is that neither the US dollar nor financial markets can function adequately without a central bank free from political influences.

Historically, politicized central banks have often been associated with high or even extreme inflation, disorderly stock market movements, and financial outflows – not a great cocktail.

The US President wants to see rates go down further.

However, the Fed can’t commit due to a still solid labor Market (Unemployment Rate is higher than it was a few years ago, but still very low in the grand scheme of things) – And a still very unclear inflation picture – More on this tomorrow morning (US CPI releases at 8:30 A.M. ET).

The consequences? Anxious investors, volatile movements, and a pursuit of diversification away from the US Dollar.

Most heavily traded metals have rallied to new all-time or yearly highs after the headline, stocks sharply opened lower, the Dollar shot down, and a general angst regarding the outcome arose.

Even US Treasury Secretary Scott Bessent expressed his confusion regarding the event.

Discover:

• Fed Chair Powell is Under Attack – Silver (XAG/USD) and Gold (XAU/USD) Fresh All-Time Highs
• Traders are Moving Past Powell's Investigation - US Stock Index Outlook & Pre-CPI Trading Levels
• Key Support Holds for GBP/USD as Traders Eye US Inflation and UK GDP

Stock Market Heatmap – Widespread Rally except for Healthcare and Softwares

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Market Close Heatmap – Source: TradingView – January 12, 2026

Cross-Assets Daily Performance

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Cross-Asset Daily Performance, January 12, 2026 – Source: TradingView

You can see how volatile cross-asset performance was today with many classes falling, recovering etc.

Despite a session which finally turned risk-on, some doubts remain – CPI is coming up tomorrow and with the latest event, things could look grim in any strong beat.

Too, with all the geopolitical events, Markets have remained calm. A potential time bomb?

Oil and Bitcoin are moving quite sharply since the close.

I'll be posting on any headlines if there's any.

A picture of today's performance for major currencies

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Currency Performance, January 12, 2026 – Source: OANDA Labs

There has been two themes in FX Markets today.

The first one being a huge selloff in the US Dollar after the investigation got revealed, pushing all majors higher (except for one) – The Kiwi Dollar is the standout winner of the session as business confidence rebounded from the latest release.

The second, less market shaking, is the fresh wave of Yen selling to start the week. JPY bulls are not enjoying the announcement for next month's Japanese snap elections, when the PM Takaichi could grab more power and drown the Yen in further dilution.

The Nikkei actually loves this, up 5% since Friday.

A look at Economic data releasing throughout this tonight and tomorrow's sessions

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For all market-moving economic releases and events, see the MarketPulse Economic Calendar.

Things will get quite busy in the next 24 hours.

Today's evening session will start with a speech from the very influential NY Fed Williams at an International Economics event (look for clues regarding the upcoming Rate Decision and his views for 2026).

For the rest, mid-tier data for Australia, Japan, and the UK between 18:30 and 19:00.

But the real test will be tomorrow:

The US session will start the festivities, with the ADP Weekly report at 8:15 a.m. (Will the labor picture still rebound?)

But most importantly, an up-to-date US CPI report.

This one will be the most important in almost six months, as the Bureau of Labor Statistics' closure has hurt all reports since October (so the last clear CPI was released in September – that's a while ago!)

For the rest of the day, expect a few speeches from Fed officials Musalem and Barkin, two non-voters who still offer interesting insights into their 2026 outlooks.

In terms of data, there will be the US New Home Sales release at 10:00 and the US Monthly Budget at 14:00.

The evening session will then present some Trade data for China – of high importance for the global economy outlook.

Safe Trades and a Successful Week!

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