DOJ Open Criminal Investigation into Federal Reserve Chair Jerome Powell
Federal Reserve chair Jerome Powell has revealed that US federal prosecutors have opened a criminal investigation into him. Powell said the Department of Justice has issued subpoenas linked to testimony he gave to senators about the costly renovation of two Federal Reserve buildings in Washington. He described the situation as “unprecedented” and suggested it was driven by President Donald Trump’s frustration with the Fed for not cutting interest rates faster.
“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,” Powell said.
The investigation focuses on comments Powell made about a renovation project at the Fed’s headquarters, which is the first major overhaul since the buildings were constructed in the 1930s. Trump has labelled the project as wasteful, claiming it could cost $3.1bn compared with the Fed’s estimate of $2.5bn. The central bank says the work includes essential safety upgrades, such as removing asbestos and lead, and will save money in the long run.
Trump denied any involvement in the probe, telling NBC News: “I don't know anything about it, but he's certainly not very good at the Fed, and he's not very good at building buildings.” The Justice Department has not commented publicly.
Powell, who was first appointed by Trump in 2017 and is due to step down as chair in May, said the threat of criminal charges was retaliation for resisting White House pressure on interest rates. “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,” he said.
The dispute is now complicating Trump’s plans to name Powell’s successor. Republican Senator Thom Tillis, a member of the Senate Banking Committee, said he would block any Fed nominations until the investigation is resolved. “If there were any remaining doubt whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none,” he said.
Democratic Senator Elizabeth Warren also condemned the move, accusing Trump of trying to force Powell out and install “another sock puppet” to run the Fed.
Powell warned that the stakes go beyond his own position, saying: “I have deep respect for the rule of law and for accountability in our democracy. No one, certainly not the chair of the Federal Reserve is above the law, but this unprecedented action should be seen in the broader context of the administration's threats and ongoing pressure.”
