Fed Watch – 1/13/2026

with brian beaulieu

Special Update: Is Fed Independence at Risk?

In this special edition Fed Watch episode, ITR Economics Chief Economist Brian Beaulieu steps in to address recent news that raised concerns across financial markets. He breaks down the DOJ subpoenas served to the Federal Reserve, explains why Fed independence matters for businesses and investors, and analyzes why markets have remained calm so far. With uncertainty already high, understanding what truly moves rates, equities, and confidence is critical. Are markets underreacting, or is this a signal of stability?

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Key Episode Takeaways

  • 00:13 – DOJ subpoenas and initial concerns about Fed independence
  • 00:57 – Bond yields, equities, and dollar reaction
  • 01:52 – What to watch next and potential risks ahead
Today so far, the markets have shrugged it off. We saw some initial rise in the 10-year government bond yield, but really was not worrisome. - Brian Beaulieu Share on X
We will update you, hopefully, on how the markets have been calm and cool and collected and not that indictments had been handed down. - Brian Beaulieu Share on X

The below transcript is a literal translation of the podcast audio that has been machine generated by Notta.

Hello, I’m Brian Beaulieu, Chief Economist at ITR Economics, sitting in for Lauren Saidel-Baker for this special edition of Fed Watch.

There was interesting news Sunday night, many of us were watching football, and we saw late in the evening this announcement that the Fed was being served subpoenas by the DOJ having to do with the construction that was done at the Fed building. To many in the news, and frankly, this was our first, my first interpretation, it looked like really an effort to coerce the Fed and therefore was a push on the Fed’s independence. As you know from our keynotes talks and other material, it’s been one of our major concerns that the Fed would lose their independence.

So we waited with bated breath for Monday to roll around, roll through. And even today so far, this is now Tuesday afternoon, the markets have shrugged it off. We saw some initial rise in the 10-year government bond yield, but really was not worrisome. The stock market really shrugged it off. It went up, what, two-tenths of a percentage point yesterday, and it’s up a little bit so far today. And the US dollar weakened a little bit, but it had been weakening. So to ascribe any of these minor changes to this news would be putting us in the same category as some other media outlets. So far, the markets have shrugged it off. And we’re grateful for that. We don’t need any more consternation to have to delve through.

We’ll keep an eye on it this week and we’ll make it part of our update for this Friday’s regularly scheduled Fed Watch. Lauren’s going to not be available for that one, so I’ll be doing that one also. So I look forward to seeing you on Friday when we will update you, hopefully, on how the markets have been calm and cool and collected and not that indictments had been handed down, which could be a whole different story. Thank you for watching this special edition of Fed Watch. It’s great to see you again.