Donald Cohn, the former Vice Chair of the Federal Reserve, recently told the F.T. Economics

show the story of how during the global financial crisis, Ben Bernanke used to joke

that his memoirs would one day be titled before Japan opens.

The joke referred to the Fed's frantic weekend efforts during that period to get emergency

announcements out on a Sunday night aimed at stabilising global markets before the Monday

morning bell in Tokyo.

Historically, these Sunday night announcements are quite rare.

Because the Fed values stability above all else, unscheduled weekend

announcements are the sort of thing worth worrying about, as they tend to be about terrible situations.

The 2008 collapses of Bear Stearns and Lehman Brothers, the emergency liquidity injections at the

onset of the pandemic in 2020 and the

regional banking crisis a few years ago that claimed Silicon Valley Bank amongst others.

Under normal conditions, investors don't spend their weekends worrying about what's going

on at the Fed. So when they hear there will be a Sunday night announcement, they sit up and take

note. The recent silence from the Fed was shattered last Sunday, but this time the emergency

was not a failing bank or a credit freeze. It was a direct legal assault from the White House.

Jerome Powell, the data-driven Fed chair appointed by Donald Trump in 2018,

appeared in an extraordinary video message announcing that the Department of Justice had just

served the Fed with grand jury subpoenas. The threat was a criminal indictment over Powell's

congressional testimony regarding cost overruns in renovations

of the Fed's headquarters.

Powell did not reach for the usual polite central bank code. He stated plainly that the building

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