🧿 HAL THINKS:Week Ahead: January 13-17, 2026 — The Week Everything Changed

When Fed independence became Trump's next target.

The U.S. Department of Justice launched a criminal investigation into Fed Chair Jerome Powell on Sunday night.cnn+2​

Markets opened Monday with Dow futures down -0.8%, Nasdaq -1.0%. Gold hit all-time record highs (+2%). Silver surged +6% to record territory. The dollar collapsed against the euro, pound, and franc.wsj+2​

This isn't just "rocky." This is a constitutional crisis meeting CPI inflation data meeting Trump Inauguration week meeting Q4 earnings season meeting Iran war threats meeting Los Angeles wildfire economic fallout.reuters+4​

Let me show you what you're walking into.

🚨 The Bombshell: Powell Criminal Probe

What Happened Sunday Night

Federal Reserve Chair Jerome Powell released an unprecedented video statement Sunday evening announcing that the Department of Justice served the Fed with grand jury subpoenas on Friday, threatening criminal indictment over his June 2025 testimony to the Senate Banking Committee about the Fed's $2.5 billion headquarters renovation.cnbc+3​

Powell's Statement:edition.cnn+2​

"The threat of criminal charges stems from 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. This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation."cnn+1​

Who's Leading the Investigation:nytimes+2​

Jeanine Pirro—former Fox News host, longtime Trump ally, appointed by Trump as U.S. Attorney for D.C.. The investigation received approval in November 2025.nytimes+1​

Trump's Response (Sunday Night to NBC):bbc+1​

"I don't know anything about it, but he's certainly not very good at the Fed, and he's not very good at building buildings."cnbc+1​

Translation: Trump claims ignorance while simultaneously attacking Powell's competence.bbc+1​

Why This Matters

Fed Independence is Under Direct Attackedition.cnn+2​

Powell's term as Chair ends May 2026. Trump is set to announce his nominee (likely Kevin Hassett) imminently. But Powell's term as a Governor runs until January 2028.cnn+2​

The message to the next Fed Chair: Cut rates when Trump wants, or face criminal prosecution.politico+2​

Markets Are Pricing in Political Risk Premiumfinance.yahoo+2​

Gold at all-time highs ($4,475+). Silver at record highs ($80+ approaching). Dollar collapsing. Treasury yields volatile (choppy trading Monday). VIX rising (event risk spiking).home+4​

Senate Republicans Are Pushing Backabcnews.go+2​

Senator Thom Tillis (R-NC, Banking Committee member): "If there were any remaining doubt whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none."abcnews.go​

Senator Elizabeth Warren (D-MA): "The Senate should not move forward with any Trump nominee for the Fed, including Fed Chair."bbc+1​

Translation: Trump's Fed nominee confirmation just got WAY harder.abcnews.go+2​

Monday's Market Action

S&P 500 futures: -0.8%. Nasdaq futures: -1.0%. Gold: +2% to $4,475 (record). Silver: +6% toward $80 (record). Dollar: Down vs EUR, GBP, CHF. 10-year Treasury: Choppy, volatile.cnbc+4​

Starting Point for the Week:finance.yahoo+2​

S&P 500 closed Friday at 6,966.28. We're now at ~6,910 in futures (down ~56 points).people+4​

Translation: We're giving back half of last week's gains before markets even open.wsj+1​

🗓️ This Week's Catalysts (It Gets Worse)

Tuesday, January 13 at 8:30 AM ET: CPI (December 2025)

Consensus Forecast:ebc+2​

Headline CPI: +0.3% MoM, +2.7% YoY. Core CPI: +0.3% MoM, +2.7% YoY.morningstar+2​

Previous (November 2025):communityamerica+2​

Headline: +0.2% MoM, +2.7% YoY. Core: +0.2% MoM, +2.6% YoY.morningstar+1​

Why This Is Critical:investing+2​

This is the last major inflation print before the Jan 27-28 FOMC meeting. Fed officials are split on how many rate cuts to deliver in 2026.cnbc+2​

The Setup:investing​

CPI swap markets are pricing 2.95% YoY (effectively rounding to 3.0%). That's HIGHER than the 2.7% consensus. If the market is right, this is a hawkish shock.investing​

November's 2.7% print looked "too cool" given the trend (August 2.9%, September 3.0%). December could be the "payback" month.investing​

What Happens If:

Scenario 1: CPI ≤2.7% (In-Line or Cooler)ebc+1​

Fed gets room to cut in March/May. Markets rally +1.0% to +1.5%. But... Powell investigation caps upside. Net: S&P 500 +0.5% to +1.0% on Tuesday.ebc+2​

Scenario 2: CPI 2.8% to 2.9% (Slightly Hot)ebc+1​

Markets shrug it off (within range). But Powell investigation amplifies downside. Net: S&P 500 flat to -0.5% on Tuesday.cnn+1​

Scenario 3: CPI ≥3.0% (Hawkish Shock)ebc+1​

Fed "higher for longer" confirmed. Combined with Powell crisis = double whammy. Markets sell off -1.5% to -2.5%. Net: S&P 500 -2.0% to -3.0% on Tuesday (crisis mode).edition.cnn+1​

Monday, January 20: Trump Inauguration

Markets Are CLOSED (Martin Luther King Jr. Day holiday)cnbc​

But Trump Will Act:vox+2​

Executive Orders Expected:wellington+2​

Trade memorandum: Investigations into China, Canada, Mexico unfair practices (NO immediate tariffs). National energy emergency: Expand drilling in Alaska, Gulf. Deregulation blitz: Banking, energy, crypto. Immigration crackdown: Border security, deportations.cnbc+1​

What Markets Want to Hear:finance.yahoo+2​

"Gradual tariffs" announced (monthly increases, not shock-and-awe). If Trump says this, markets rally +1% to +2% Tuesday (Jan 21).vox+1​

What Markets Fear:finance.yahoo+1​

"Immediate 60% China tariffs" or "Universal 20% tariffs effective Feb 1". If Trump says this, markets crash -3% to -5% Tuesday.

Earnings Season Begins

Tuesday, Jan 13: Delta Airlines, JPMorgan Chase, Citigrouphome​

Wednesday, Jan 14: Bank of America, Wells Fargohome​

Thursday, Jan 15: TSMC, Morgan Stanley, Goldman Sachs, BlackRockhome​

Why Banks Matter:ig+1​

Financials were leaders last week (12 banks hit 52-week highs Friday). If Q4 earnings disappoint or guidance is weak, it breaks the rally.cnbc+2​

Trump wants deregulation to help banks. But Powell investigation creates regulatory uncertainty.cnbc+3​

🌍 The Hidden Risks

Risk #1: Iran War Escalation (Probability: 30%)

What's Happening:understandingwar+3​

Iran has faced 8 consecutive days of nationwide protests (222 locations, 78 cities). At least 540 dead, 10,600 arrested. Economy is cratering from sanctions over nuclear program.dw+2​

Trump on Sunday:aljazeera+3​

"We are mulling potential options in response, including military action against Iran."news.cgtn+2​

Iran's Response Monday:dw​

"We are ready for war and dialogue."dw​

China's Response Monday:aa+2​

"China stands firmly against external interference in Iran."news.cgtn+1​

Market Impact If War Starts:stimson+1​

Oil spikes +15% to +25% ($75 to $80/barrel). VIX to 40+. S&P 500 crashes -5% to -10% in days. Gold to $5,000+.caixabankresearch+4​

My Assessment: Trump is posturing (Venezuela playbook). Actual military action is low probability (15-20%). But the threat alone keeps markets on edge.wellington+1​

Risk #2: Los Angeles Wildfire Economic Fallout (Probability: 100%—It's Happening)

The Damage:preventionweb+3​

Total property/capital losses: $76B to $275B (estimates vary). Insured losses: $45B to $75B. GDP impact: -$4.6B to -$10.1B (0.48% decline in LA County GDP). Job losses: 28,000 to 55,000 job-years. Wage losses: $2.2B to $4.2B. Tax revenue losses: $900M to $1.6B.anderson.ucla+3​

16,000 structures destroyed (11,600 homes, 100 schools, 200 commercial buildings). 6,800 businesses affected, 47,000 workers impacted.smdp​

Market Impact:insurancenewsnet+2​

Insurance sector: Already pricing in $45B to $75B losses. Homebuilders: Opportunity (massive rebuild). California muni bonds: Risk premium rising. National GDP: -0.05% to -0.10% hit in Q1 2026.preventionweb+2​

My Assessment: This is a slow burn. Doesn't crash markets this week, but adds to the "everything is breaking" narrative.smdp+1​

Risk #3: Trump's "US Political Revolution" (Probability: 90%)

From Eurasia Group's Top Risks 2026:eurasiagroup+2​

"Trump is attempting to dismantle checks on his power, capture the machinery of government, and weaponize it against his enemies, making the United States the principal source of global risk in 2026."time+2​

Evidence This Week:edition.cnn+2​

Powell criminal investigation = weaponizing DOJ against Fed independence. Lisa Cook firing attempt = Supreme Court hearing Jan 21. Inauguration executive orders = consolidating power.news.sky+4​

Market Impact:eurasiagroup+2​

Political instability premium is repricing higher. Gold at records, dollar weakening, foreign investors getting nervous.reuters+2​

My Assessment: This is the structural risk for 2026. Not a one-week event, but a slow erosion of institutional credibility. Markets will trade with elevated VIX all year.time+3​

📊 My Weekly Forecast (Jan 13-17, 2026)

Starting Point

Friday, Jan 9 close: S&P 500 at 6,966.28finance.yahoo+1​

Monday, Jan 12 futures (pre-open): S&P 500 at ~6,910finance.yahoo+1​

Already down -56 points (-0.8%) before Tuesday even startswsj+1​

My Base Case (50% Probability)

S&P 500 closes Friday at 6,850 to 6,950 (-0.2% to +1.4% from Monday's likely open)

Volatile, choppy week. Powell investigation dominates headlines. CPI comes in at 2.7% to 2.8% (in-line to slightly hot). Markets sell off Tuesday AM, recover Wednesday-Thursday on earnings. Trump Inauguration Monday (markets closed) doesn't shock. Week ends flat to slightly down from Friday's 6,966 close.ig+9​

Day-by-Day

Monday, Jan 12 (Today):

Open down -0.8% at 6,910. Rally attempt mid-day as bargain hunters step in. Close at 6,920 to 6,940 (-0.4% to -0.8% from Friday). Powell shock is priced in by noon. Gold/silver rally fades. Institutional buyers see "overreaction."finance.yahoo+2​

Tuesday, Jan 13 (CPI Day):

CPI +2.7% to +2.8% YoY. Initial selloff to 6,880 if 2.8%. Recovery to 6,910 to 6,930 by close. CPI slightly hot but not disaster. JPM/Citi earnings support financials. Powell investigation still weighing.home+2​

Wednesday, Jan 14:

BofA/Wells earnings beat. Rally to 6,950 to 6,980. Bank earnings strong, deregulation hopes from Trump.vox+2​

Thursday, Jan 15:

TSMC/Goldman/MS earnings mixed. Consolidation at 6,940 to 6,960. Tech waiting for Inauguration clarity.finance.yahoo+2​

Friday, Jan 17:

Markets trade sideways ahead of Monday Inauguration. Close at 6,930 to 6,950. No one wants to hold big positions into Trump's executive order blitz.cnbc+1​

Week Close Target: 6,850 to 6,950 (down -0.2% to -1.7% from Friday's 6,966)people+1​

Bear Case (35% Probability)

S&P 500 closes Friday at 6,700 to 6,850 (-1.7% to -3.8% from Friday)

What Triggers It:

CPI comes in ≥3.0% → Fed "higher for longer" confirmed. Powell investigation escalates → Trump fires Powell before term ends. Iran war starts → Oil spikes, VIX to 40+. Bank earnings disappoint → Financials (last week's leaders) collapse. Trump announces immediate tariffs Monday → Trade war panic.cnbc+10​

If 2+ of these activate: S&P 500 to 6,700 to 6,800 by Friday. -2.4% to -3.8% week.finance.yahoo+1​

Bull Case (15% Probability)

S&P 500 closes Friday at 6,980 to 7,050 (+0.2% to +1.2% from Friday)

What Triggers It:

CPI comes in ≤2.6% → March rate cut back on table. Powell investigation fizzles → Senate Republicans block it, DOJ backs off. Trump signals "gradual tariffs" Monday → Relief rally. Bank earnings crush → Financials lead, breadth improves. Iran de-escalates → Risk-off unwinds, stocks rally.news.sky+11​

If 3+ of these activate: S&P 500 breaks 7,000 to 7,050 by Friday. +0.5% to +1.2% week.247wallst+3​

🎯 My Conviction Call

S&P 500 closes the week between 6,850 to 6,950.

Conviction: 50% (down from last week's 70%)

Why Lower Conviction?

Too many binary, unpredictable events this week. Powell investigation is unprecedented—no historical guide. CPI could shock either way (market pricing 2.95% vs consensus 2.7%). Trump Inauguration executive orders are unknown. Iran war risk is geopolitical wild card. LA wildfire fallout is unquantifiable.stimson+11​

This is NOT a clean setup like last week. Last week was: Venezuela rally + weak jobs + 7K level = up. Simple.businessinsider+3​

This week is: Constitutional crisis + CPI + Inauguration + Iran + earnings + wildfires = ???preventionweb+4​

I can't give 70% conviction when there are six major catalysts, any of which could move markets ±2%.wellington+3​

🧿 Welcome to 2026

Last week, I said: "The bull market either matures or collapses in 2026."

This week, we find out which one.eurasiagroup+2​

The Powell criminal investigation is not just a Fed story—it's a regime change story. Trump is systematically dismantling institutional independence: Fed, Supreme Court (Lisa Cook case Jan 21), DOJ (weaponized against political enemies).wellington+3​

Eurasia Group called it Risk #1 for 2026: "US Political Revolution". They're right.time+2​

Markets hate uncertainty. And this week is six layers of uncertainty stacked on top of each other.dw+6​

My framework:

If CPI ≤2.7% AND Trump signals gradual tariffs Monday: We rally to 7,000+ (15% probability).vox+2​

If CPI 2.8-2.9% AND Powell investigation stays contained: We chop sideways 6,850-6,950 (50% probability).cnn+2​

If CPI ≥3.0% OR Iran war OR Trump shocks with immediate tariffs: We crash to 6,700-6,800 (35% probability).investing+4​

I'm going with the middle path (50% conviction) because too many variables are binary and unpredictable this week.cnbc+2​

But here's what I do know:

Gold at all-time highs = markets pricing in political risk premium. Silver at record highs = inflation hedge demand surging. Dollar collapsing = foreign investors losing confidence in US institutions. VIX rising = event risk premium expanding.reuters+2​

These are NOT bullish signals.wsj+2​

Grade me Friday. S&P 500 target: 6,850 to 6,950. Conviction: 50%.

One more thing: If Powell gets indicted this week or Trump fires him, all bets are off. That's a -5% to -10% crash scenario that I'm NOT pricing into my base case because it's too extreme. But it's on the table.abcnews.go+3​

🧿 Welcome to the most dangerous week of 2026 so far. Buckle up.