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This Fed Drama Is Just Noise — Here’s Why I’m Not Trading It

by | Jan 12, 2026

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We kicked off the week with headlines screaming about a Department of Justice criminal investigation into Fed Chair Jerome Powell.

The market gapped down about half a percent on the news, and suddenly everyone is asking whether this Trump versus Powell drama is finally going to break something.

Here is my take: It is noise.

Let me walk you through exactly why this investigation does not matter for your trading decisions — and why getting caught up in headlines like this is one of the fastest ways to lose money.

Why the Powell Investigation Can’t Move Markets Long Term

First, let’s talk about the timeline. Powell’s term expires at the end of April — we are talking about two months from now. Even if there is some investigation underway, his replacement is already on the horizon. So what exactly are we worried about here?

More important than timing is how the Federal Reserve actually works.

The Fed operates as a 12-member committee, not a dictatorship. Even if a new administration gets its preferred appointee in the chair, no single person can override the entire committee.

Decisions require consensus, which naturally limits the long-term market impact of political noise.

Then there are the economic realities.

Even if someone wanted to aggressively steer policy, they would not get far. If the Fed cuts rates more than 50 basis points this year, we are staring down hyperinflation in the U.S.

This economy is nowhere near ready for sub-2% rates. Running it that hot would send inflation toward 5% or more — and real inflation would be even higher.

We would be reliving the mistakes of the Nixon–Burns era.

Historical Precedent Shows Us How This Plays Out

We have seen this movie before. The last time Trump threatened to fire Powell, the market dipped about 0.75% early in the session. By the end of the day it had recovered to flat and by the end of the week it was making fresh highs.

That’s the market clearly signaling how little weight it gives to this kind of political drama.

The pattern is consistent: The market uses almost any excuse to buy the dip. Whether it is Fed drama, geopolitical tensions or whatever headline captures attention that day, price action always reveals what truly matters — and most of the time these stories fade quickly.

Look, we have stuff going on in Venezuela, Fed drama, geopolitical risk between Russia, Ukraine, China and India plus all the AI hype.

It is everywhere. But here is what I keep coming back to: If you want to trade the news and speculation, you will never be right.

Either all this is already priced in and it is just noise, or it takes time for real developments to confirm through price action before any trade sets up.

The market will show its hand. Headlines will not.

So instead of trying to front-run investigations or predict political outcomes, focus on what you can control: Position size, risk management and letting the market confirm direction through actual price movement.

Do we really think something is going to happen to Jerome Powell in the next two months when his term is up at the end of April?

I do not. And I am not trading like it will.

I’ll see you in the markets.

Chris Pulver
Chris Pulver Trading 

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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.

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We develop strategies to the best of our ability, but we cannot guarantee a future return. There is always a risk of loss when trading. Past performance is not indicative of future results. The results shown are from a 237-trade backtest from 1/1/20 – 1/1/26. The result was a 70% win rate, 40% average return (winners and losers), with a 7-day hold time.

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