Federal Reserve Chairman Jerome Powell is under criminal investigation by the U.S. Department of Justice regarding his congressional testimony about the central bank’s multi-billion dollar headquarters renovation project, marking an unprecedented escalation of tensions between the nation’s monetary authority and the executive branch.
In a dramatic Sunday evening statement posted on the Federal Reserve’s official website, Powell confirmed that federal prosecutors had served the central bank with grand jury subpoenas on Friday, threatening criminal indictment related to his June testimony before the Senate Banking Committee. The investigation, overseen by the U.S. Attorney’s Office for the District of Columbia according to local media reports, centers on Powell’s statements concerning the extensive renovation of historic Federal Reserve office buildings.
Powell framed the investigation as political retaliation, stating: ‘This unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.’ He explicitly connected the legal threat to the Fed’s interest rate decisions, asserting that ‘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.’
The Fed chairman emphasized the fundamental principle of central bank independence, warning that ‘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.’ Despite the investigation, Powell vowed to ‘continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people.’
The investigation emerges against a backdrop of sustained tension between Powell and President Donald Trump, who has repeatedly criticized the Fed chairman’s interest rate decisions since taking office in January 2025. Powell, initially appointed by Trump in 2018 and reappointed by former President Joe Biden in 2022, is serving a term scheduled to expire in May 2026.