Stocks Retreat on Concerns Over Fed Independence

Economic Indicators - December CPI is expected to remain unchanged from November at +2.7% y/y, while December core CPI is anticipated to rise to +2.7% y/y from +2.6% y/y in November [1] - October new home sales are projected to decline by -10.6% m/m to 715,000 [1] - November PPI final demand is expected to increase by +2.7% y/y, with core PPI also expected to climb by +2.7% y/y [1] - November retail sales are anticipated to increase by +0.5% m/m and +0.4% m/m excluding autos [1] - December existing home sales are expected to rise by +2.2% m/m to 4.22 million [1] - Weekly initial unemployment claims are expected to increase by +7,000 to 215,000 [1] - January Empire manufacturing survey is expected to rise by +4.9 to 1.0 [1] - December manufacturing production is expected to fall by -0.1% m/m [1] - January NAHB housing market index is expected to increase by +1 to 40 [1] Federal Reserve and Market Reactions - Fed Chair Powell stated that the Federal Reserve received grand jury subpoenas from the Justice Department, which could lead to a criminal indictment related to his congressional testimony [2] - Concerns about Fed independence have increased due to the Trump administration's criticism, leading to a "Sell America" sentiment in US asset markets [3] - The 10-year T-note yield rose by +2 bp to 4.19% amid these concerns [3] - March 10-year T-notes are down by -4 ticks, with the yield up by +2.6 bp to 4.191% [6] - The 10-year breakeven inflation rate rose to a 1.75-month high of 2.30% [6] Stock Market Movements - The S&P 500 Index is down -0.23%, the Dow Jones is down -0.58%, and the Nasdaq 100 is down -0.27% [4] - Credit card companies and bank stocks are declining after President Trump announced that lenders must cap interest rates at 10% for one year, with Synchrony Financial down more than -7% [10] - Mining stocks are rising as gold and silver prices reached new all-time highs, with Hecla Mining up more than +8% [11] - Shake Shack reported preliminary Q4 revenue of $400.5 million, below its forecast, leading to a decline of more than -2% in its stock [12] - ANI Pharmaceuticals is up more than +8% after forecasting 2026 net revenue of $1.055 billion to $1.1185 billion, exceeding consensus expectations [14]