GLOBAL MARKETS-Stocks wobble, dollar dips as Trump-Fed feud deepens

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Powell calls threat of indictment a pretext to pressure rates

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Dollar falls broadly, S&P 500 futures down 0.5%

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Gold breaches $4,600 an ounce as Iran unrest escalates

(Updates to Asia afternoon)

By Tom Westbrook

SINGAPORE, Jan 12 (Reuters) - The dollar slipped and U.S. equity futures eased on Monday after Federal Reserve Chair Jerome Powell said the Trump administration threatened him with a criminal indictment, stoking worries about the central bank's independence.

S&P 500 futures were down 0.5% and gold hit ?another record high in the immediate reaction to the escalation of the tussle between U.S. President Donald Trump and the Fed.

The Swiss franc strengthened 0.4% to 0.7979 per dollar and ?the euro was 0.17% firmer at $1.1656. Traders said the news was unsettling, though the immediate implication for interest rates was not ?clear.

Fed funds futures have added in about three basis points more in cuts this year, ?which is small but points ?to the risk that the Fed gets pushed into being more aggressive.

Gold struck a record high of more than $4,600 an ounce, also buoyed by geopolitical tensions as unrest ?in Iran lifted precious metal prices and supported oil.

European stock futures inched ?lower although Asian stocks rose on Monday led by the technology sector after data on Friday showed the U.S. labour market was not rapidly deteriorating even as employment growth slowed.

Japanese markets were closed for a ?holiday.

TRUMP VS POWELL

On Sunday, Powell said the Trump administration had threatened ?him with a ?criminal indictment and served grand jury subpoenas over Congressional testimony he gave last summer regarding a Fed building renovation project, an action he called a "pretext" aimed at pressuring the central bank to cut interest rates.

The developments amount to a ?dramatic escalation in the fight between Powell and Trump, which dates back to the banker's first years as chair in 2018.

"Trump is pulling at the loose threads of central bank independence," said Andrew Lilley, chief rates strategist at Barrenjoey, an investment bank based in Sydney.

"The only reason that he's taking these steps is that he knows that he's not going to take control of the Fed, so he wants to exert as much undue pressure as he can.

"Investors won't be happy about it, but it shows ?actually Trump has ?no other levers to pull. The cash rate will stay what the majority of the FOMC wants them to be."

DOLLAR IN CROSSHAIRS

The dollar had the sharpest reaction, falling even against typically risk-sensitive currencies like the Australian and ?New Zealand dollars. The dollar index was 0.3% lower and on track for the biggest one-day decline since mid-December.

The dollar had a miserable 2025, dropping more than 9% against major peers due to shrinking interest rate differentials as the Fed cut rates and as concerns about U.S. fiscal deficits and political uncertainty swirled.

"This open warfare between the Fed and the U.S. administration ... it's clearly not a good look for the U.S. dollar," said National Australia Bank's (NAUBF) head of currency strategy, Ray Attrill.

Elsewhere, Trump's threats to intervene in Iran, where protests against the clerical establishment appear to be intensifying, helped ?oil prices hold recent gains and underlined the swirling geopolitical risks for the year ahead.

After sharp gains in recent sessions, benchmark Brent crude futures were down about 40 cents to $62.90 a barrel.

The second full week of the New Year will include U.S. inflation data, trade figures from China and a slew of U.S. earnings ?beginning with JPMorgan Chase (JPM) and BNY on Tuesday. (Reporting by Tom Westbrook; Additional reporting by Ankur Banerjee; Editing by Thomas Derpinghaus and Jamie Freed)