Stock futures slide while gold and silver jump after Powell investigation raises fears over the Fed’s independence

U.S. equity futures fell sharply Sunday night after Federal Reserve Chair Jerome Powell confirmed that he is under investigation related to testimony he gave last June concerning the renovation of Federal Reserve buildings. 

The New York Times report breaking news of the investigation and Powell’s subsequent disclosure rattled markets, reviving fears that years of President Donald Trump pressuring the Federal Reserve could now be realized into a direct assault on its independence.

Futures tied to the Nasdaq 100 led the decline, falling about 0.8%, as interest-rate-sensitive technology stocks bore the brunt of the selloff. S&P 500 futures were down roughly 0.5%, while Dow Jones Industrial Average futures fell about 0.4%, according to late-evening pricing.

Investors sought protection in the traditional safe-haven assets. Gold futures rose 1.7% to around $4,578 an ounce, while silver jumped more than 4%, reflecting renewed demand for protection against political and monetary instability. The U.S. dollar weakened modestly against several major currencies, including the Swiss franc and Japanese yen.

After years of largely staying silent while Trump repeatedly mocked and threatened him, Powell appeared to have reached a breaking point, issuing a rare and pointed statement. 

He wrote that while “No one—certainly not the chair of the Federal Reserve—is above the law,” the attack should be seen in the “the broader context of the administration’s threats and ongoing pressure.” 

“This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings…Those are pretexts. The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President.”

Economists warn that if the executive branch successfully co-opts the Fed, it could create a “self-fulfilling prophecy” of higher long-term inflation.

As Oxford Economics recently noted, any “cracks in the Fed’s independence” could spread rapidly through markets and ultimately raise borrowing costs for the businesses the administration seeks to protect with low interest rates. 

In a note published last July, when Trump publicly threatened to fire Powell, Deutsche Bank warned that such a move could spark severe market disruption.

“Both the currency and the bond market can collapse,” the bank wrote, citing heightened risks of inflation and financial instability. “The empirical and academic evidence on the impact of a loss of central-bank independence is fairly clear.”

Wall Street executives have echoed those concerns. Brian Moynihan, chief executive of Bank of America, said recently the erosion of Fed independence would carry serious consequences.

“The market will punish people if we don’t have an independent Fed,” Moynihan said.

This story was originally featured on Fortune.com