U.S. Department of Justice has opened a criminal investigation into Federal Reserve Chair Jerome Powell
The U.S. Department of Justice has opened a criminal investigation into Federal Reserve Chair Jerome Powell, marking a dramatic escalation in tensions between the Trump administration and the nation’s central bank. Powell confirmed late Sunday that his institution was served with grand jury subpoenas and faces the threat of criminal charges tied to his testimony last June about the Federal Reserve’s $2.5 billion renovation of its Washington, D.C., headquarters.
Powell — who was first nominated by Trump and later reappointed under President Biden — hit back forcefully in a rare video statement, calling the move a politically motivated attempt to influence Federal Reserve policy, particularly interest-rate decisions. He said the threat of prosecution was a direct result of the Fed setting rates based on economic judgment rather than political pressure.
The investigation — approved by the U.S. Attorney in Washington, D.C. — is said to focus on whether Powell misled Congress about the scope and costs of the renovation project, an issue that has drawn fierce criticism from Trump allies.
Political and Institutional Backlash
The move has sparked bipartisan concern about the independence of the Federal Reserve, a cornerstone of U.S. economic policy. Several Republican senators warned Monday that the probe could undermine confidence in both the Fed and the Department of Justice, and some threatened to block future Fed nominations in protest.
Critics, including former Fed chairs and economists, have condemned the investigation as an unprecedented encroachment on the central bank’s autonomy — with potential risks for financial markets and broader economic stability.
White House Response
The White House has denied direct presidential involvement in the DOJ’s actions, though Trump has publicly criticized Powell for not delivering steeper interest-rate cuts and for the renovation costs. Administration officials maintain that the Justice Department is pursuing allegations of potential misuse of funds and misleading testimony.
As this story evolves, lawmakers, economists and international observers are watching closely for its implications on monetary policy, federal institutional norms, and the broader independence of the Federal Reserve.
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