A criminal probe into Jerome Powell has turned a long-running rate dispute into a high-stakes test of Federal Reserve independence.

November’s CPI delivered one of the largest downside surprises in years, but markets are treating the data as a signal to scrutinize, rather than a conclusion to embrace.

Markets are already reacting to the Federal Reserve’s next chair before a nomination is made, signaling that institutional credibility rather than policy changes is the macro variable now being priced.