Kia ora, good morning and welcome to your Tuesday dose of international business and political news from overnight.
First, the war of words between US President Donald Trump and Federal Reserve chair Jerome Powell has escalated. In a unique address, Powell said the US Department of Justice served the Fed with subpoenas and threatened a criminal indictment over testimony he gave to a Senate committee about renovations to Federal Reserve buildings.
Powell thought it was because of Trump's anger over the Fed's refusal to cut interest rates. Trump said he did not "know anything" about the investigation.
Powell didn’t beat around the bush in brief remarks.
“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. 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.
“I have served at the Federal Reserve under four administrations, Republicans and Democrats alike. In every case, I have carried out my duties without political fear or favour focused solely on our mandate of price stability and maximum employment. Public Service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do with integrity and a commitment to serving the American people.”
US President Donald Trump.
Economic leaders, including former Fed chairs Janet Yellen, Ben Bernanke, and Alan Greenspan, rallied behind Powell.
"The Federal Reserve's independence and the public's perception of that independence are critical for economic performance," they wrote. Yellen also described the situation as “extremely chilling”.
Elsewhere, Trump has said the US is considering "very strong options" in Iran, after he warned he would intervene if demonstrators were killed.
Trump said Iranian leaders had contacted the US to "negotiate", but he added: "We may have to act before a meeting." He has not discussed his military options, the BBC reported.
Overnight, Iran's Foreign Minister Abbas Araghchi said his country "does not seek war" but was fully prepared for one, if attacked.
More than one hundred security personnel had been killed in recent days, while opposition activists said the death toll was much higher and included hundreds of protesters, Al Jazeera reported.
French President Emmanuel Macron denounced Iranian authorities’ use of violence against protesters. “I condemn the state violence that indiscriminately targets Iranian women and men who courageously demand respect for their rights,” Macron said.
“The respect for fundamental freedoms is a universal requirement, and we stand alongside those who defend them.”
French President Emmanuel Macron.
Alphabet, meanwhile, became one of the few companies to ever be valued at more than US$4 trillion after its shares rose as much as 1.7% to US$334.04. The company’s shares rose after CNBC reported that Apple had picked Gemini to run an AI-powered version of Siri, with Alphabet now the world’s second-largest firm, behind only Nvidia. Only Nvidia, Apple, and Microsoft have ever crossed the US$4tr barrier, with Nvidia the only company to ever be valued at more than US$5tr.
In media news, Paramount’s pursuit of Warner Bros Discovery has taken another turn as Paramount chief executive David Ellison announced a lawsuit as he attempts a hostile takeover, CNN reported.
Ellison criticised WBD for a “lack of transparency” about its decision to favour Netflix’s bid for WBD. Netflix said last week that it was in talks with US and EU regulators to receive the necessary approvals for its deal.
Elsewhere, Turkish Finance Minister Mehmet Simsek said the country’s inflation rate could slow to about 19%, to the surprise of markets, Bloomberg reported.
Inflation at 19% is in line with the upper end of the central bank’s estimated range, while analysts pencilled in inflation above 20% by the end of this year. Annual inflation eased for a third consecutive month in December to 30.9%.
Simsek may consider skipping some tax increases that usually get implemented in July to help ease inflation.
Malaysia and Indonesia have blocked Elon Musk's xAI Grok after authorities said it was being used to generate explicit and non-consensual images, the ABC and international agencies reported.
The Grok chatbot, which is accessed through Musk's social media platform X, has been criticised for generating images, including women in bikinis or sexually explicit poses, as well as images involving children.
Malaysian and Indonesian regulators said existing controls were not preventing the creation and spread of fake pornographic content.
Over the Ditch, hundreds of buildings have been destroyed and about 1000 rural properties affected by the bushfires in Victoria. Multiple fires continue to burn out of control across the state, the ABC reported.
The state government announced further emergency support payments for people who have lost their homes. The 2026 Victorian Bushfire Appeal will accept vital donations from today.
