Market Minute ⏱️ 1/12/26: Fed Fight Escalates, Fueling Gold Surge

Mike Larson | Editor-in-Chief

Stocks are sliding, while precious metals are soaring in early Monday trading. Crude oil is mostly flat, while long-term Treasuries are weaker along with the dollar.

The fight between the Trump Administration and the Federal Reserve is heating up again. Fed Chair Jay Powell released a brief video statement Sunday night, saying that a new push by the Justice Department to investigate his statements about Fed building renovation costs was an intimidation tactic. Trump has repeatedly pushed Powell and the Fed to lower interest rates further, though the president denied the latest efforts were part of a pressure campaign.

Gold Futures (5-Day Chart)

Global investors reacted by selling stocks and the US dollar – and plowing more money into gold. The yellow metal surged more than $100 an ounce to a fresh record high above $4,610 because the move suggests central bank independence – long a hallmark of the US monetary policy regime – is being eroded further. The fear is that the Fed could leave rates lower for longer, stoking future inflation and weakening the purchasing power of the greenback.

In other interest rate-related news, shares of credit card companies and banks with large card operations are sliding after Trump told them to cap card rates at 10% for a year. The president told reporters that card issuers had until Jan. 20 to comply. If they’re forced to do so, it would hit earnings from card lending – and that’s why shares of Capital One Financial Corp. (COF), American Express Co. (AXP), and other firms are under pressure.

Finally, Allegiant Travel (ALGT) said it would buy Sun Country Airlines Holdings Inc. (SNCY) for $1.5 billion in cash and stock. The deal would unite two, smaller leisure-travel airlines that predominately serve vacation destinations in the US, Mexico, Canada, Central America, and the Caribbean. After the transaction closes, the combined company will operate a fleet of almost 200 jets serving more than 650 routes.

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