Federal Reserve Chairman Jerome Powell disclosed on Sunday that federal prosecutors have initiated a criminal investigation targeting his congressional testimony regarding Federal Reserve building renovations. The unprecedented probe, announced via video statement, involves subpoenas served to the agency by the U.S. Justice Department and includes threats of criminal indictment.
Powell characterized the investigation as retaliatory, suggesting it stems directly from his refusal to accelerate interest rate cuts despite sustained public pressure from President Donald Trump. ‘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 stated.
While affirming his ‘deep respect for the rule of law and accountability,’ Powell contextualized the Justice Department’s action within what he described as the administration’s pattern of threats and ongoing pressure campaigns. The Fed chair becomes the latest high-profile figure to clash with the president and subsequently face criminal investigation.
The confrontation between Powell and Trump escalated throughout 2025, with the president repeatedly criticizing the Fed chair’s pace of interest rate reductions despite three separate cuts implemented in the latter half of the year.
Senator Thom Tillis (R-N.C.), a member of the Senate Banking Committee, announced he would block all Federal Reserve Board nominations—including Powell’s potential replacement—until the legal matter is resolved. In a strongly worded statement, Tillis warned that ‘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,’ adding that ‘it is now the independence and credibility of the Department of Justice that are in question.’
According to initial reporting by The New York Times, the investigation will be supervised by the U.S. Attorney’s Office for the District of Columbia.