U.S. Attorney Jeanine Pirro says a Justice Department inquiry into Federal Reserve Chair Jerome Powell could be resurrected. Pirro dropped the investigation last month after a federal judge blocked her grand jury subpoenas. The development intensifies political tensions surrounding the central bank's independence during a critical period for monetary policy.

Powell has been resisting President Trump's demands that the Fed slash interest rates, maintaining the central bank's traditional stance of making monetary decisions free from political interference. The investigation's potential revival raises questions about whether the administration will continue to pressure the Fed chair amid ongoing debates over rate policy. This standoff highlights the broader conflict between the executive branch and the independent central bank.

Markets have been watching the Fed's rate decisions closely, with investors concerned about political interference in monetary policy. The uncertainty around Powell's position could affect confidence in the central bank's independence, a cornerstone of U.S. financial markets. Any perceived politicization of the Fed could have far-reaching implications for investor confidence and the stability of the financial system.