The factional battle raging in Washington entered a new stage Wednesday evening with the appointment of former FBI Director Robert Mueller as special counsel to investigate alleged ties between the Trump presidential campaign and Russian officials. Mueller, who headed the FBI under George W. Bush and for the first five years of the Obama administration, was the longest-serving FBI director after J. Edgar Hoover.

The move follows a rapid-fire series of developments in Washington, including last Tuesday’s firing of FBI Director James Comey, allegations this week that Trump gave highly classified intelligence about a planned ISIS attack to Russian officials at a White House meeting the day after the Comey firing, and reports that Trump had urged Comey to drop the FBI’s investigation of his former national security adviser, Michael Flynn. The House Government Oversight Committee, Senate Intelligence Committee and Senate Judiciary Committee had all invited Comey to testify prior to the appointment of Mueller.

Leaders of the House and Senate intelligence committees have also requested all records of communications between Trump and Comey.

In announcing Mueller’s appointment as special counsel, Deputy Attorney General Rod Rosenstein cautioned, “My decision is not the finding that crimes have been committed or that any prosecution is warranted. I have made no such determination.”

Rosenstein’s order tasked Mueller with reviewing “any links and/or coordination between the Russian government and individuals associated with the campaign of President Donald Trump,” as well as “any matters that arose or may arise directly from the investigation.”

A career operative in the national security apparatus, Mueller served as the head of the FBI from 2001 to 2013, appointed by George W. Bush and continuing under Barack Obama, who asked him to stay on for an additional two years beyond the 10-year term prescribed by legislation introduced to prevent another J. Edgar Hoover, who held the post for half a century. Mueller, in the words of the New York Times, is “credited with building the modern FBI.”

Trump, who reportedly learned about the appointment after it had been made public, issued a hasty statement that did not mention Mueller’s name. “As I have stated many times,” Trump wrote, “a thorough investigation will confirm what we already know--there was no collusion between my campaign and any foreign entity. I look forward to this matter concluding quickly. In the meantime, I will never stop fighting for the people and the issues that matter most to the future of our country.”

The announcement took place only six hours after Trump delivered a belligerent commencement address at the Coast Guard academy in Connecticut. Singling out the media for attack, he declared, “No politician in history, and I say this with great surety, has been treated worse or more unfairly.” He made a thinly-veiled appeal to the military amid the deepening faction fight, telling the crowd of Coast Guard cadets and officers, “Don't give in, don't back down,” and adding, “the more righteous your fight, the more opposition that you will face.”

The announcement of Mueller’s appointment took place just two hours after US financial markets closed in the worst trading day since Trump took office. All three US stock indexes closed down, with the Dow Jones Industrial Average losing 372 points, its biggest fall in eight months. US Treasuries, considered by investors to be a safe asset, saw their values rise by the largest amount since the June 23, 2016 Brexit referendum.

According to reports in the financial press, the major driving force behind the sell-off was concerns among big investors that the deepening turbulence in Washington will impede Trump’s domestic legislative agenda of corporate tax cuts, deregulation of business and massive cuts in health care and other social programs.

On Wednesday morning, the Wall Street Journal ran a front-page article headlined “White House Turmoil Puts the GOP Agenda at Risk.” The article warned, “The series of controversies involving the president has threatened to swamp his legislative agenda on Capitol Hill, with potential hearings and widening investigations siphoning time and energy from plans to overhaul the health care system and tax code.”

After the market sell-off, one trader told the Journal “That’s people just throwing in the towel on tax reform,” while another said the infighting in Washington “puts another dent in the likelihood of getting a congressional majority to pass Trump’s agenda.”

Congressional Republicans and Democrats alike voiced support for Mueller. The appointment of a special counsel has been a principal demand of the Democrats since Trump’s inauguration, and will be taken as a green light to escalate their right-wing campaign against Trump, based on an agenda for an even more militaristic and aggressive policy in the Middle East and Eastern Europe, centrally targeting Russia.

“This is very encouraging news and his appointment should go a long way towards depoliticizing the investigation into Russia’s unprecedented interference in our election,” said Democratic Senator Jeanne Shaheen of New Hampshire.

House Minority Leader Nancy Pelosi said Mueller was “a respected public servant of the highest integrity,” but added, “A special prosecutor is the first step, but it cannot be the last.”

“Director Mueller will still be in the chain of command under the Trump-appointed leadership of the Justice Department,” Pelosi continued. “He cannot take the place of a truly independent, outside commission that is completely free from the Trump administration's meddling.”

While Mueller, as special counsel, will be answerable to Deputy Attorney General Rosenstein (with Attorney General Jeff Sessions having recused himself from the investigation), he will have discretion over the extent to which he keeps the Justice Department informed of his investigation.

The Watergate-era legislation providing for the appointment of an independent counsel completely outside the Department of Justice was allowed to expire in 1999, after the debacle of the Kenneth Starr investigation and impeachment of President Bill Clinton.

In its place, the Justice Department has provisions for the appointment of special prosecutors, who operate with greater independence than a US attorney, but can still be removed by a president willing to pay the political price. The selection of Mueller makes it more difficult for Trump to take such action.

Moreover, coming only a week after Trump fired Comey because he would not shut down the Russia investigation, the selection of Comey’s predecessor at the FBI is a clear slap in the face to the White House.

Wednesday’s events underscore the depth of the crisis gripping official political circles in the United States, the heart of world capitalism. The bitter conflicts that have erupted to the surface express the interests of rival factions of the US financial oligarchy that are both totally corrupt and reactionary.

The intensity of the conflict is ultimately an expression of the fact that neither faction has any solution to the economic and geopolitical crises facing US capitalism, expressed most directly in the staggering and endless growth of social inequality.

The force that has yet to be heard is the working class, which must intervene in the deepening political crisis on the basis of its own, socialist, political program.