The Justice Department has launched a criminal investigation into Federal Reserve Board Chair Jerome H. Powell, the central bank confirmed Sunday, Reuters and The Washington Post reported. The inquiry centers on Powell’s June testimony before a Senate panel regarding renovations at the Fed’s Washington headquarters along the National Mall.
Powell described the subpoenas as an unprecedented challenge to the Fed’s independence and accused the Justice Department of using the threat of criminal prosecution to pressure the central bank into lowering 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,” Powell said in a video posted to the Fed’s website.
The investigation comes amid years of public attacks from President Donald Trump, who repeatedly criticized Powell for not cutting rates aggressively enough to stimulate the economy. Administration officials have alleged that Powell either misled Congress or mismanaged the multiyear renovation project, though Trump himself later refrained from criticizing Powell during a rare visit to the Fed’s construction site in July.
Sen. Thom Tillis (R-North Carolina) condemned the investigation on social media, saying it casts doubt on the independence and credibility of the Department of Justice. Tillis added he would oppose confirmations for Fed nominees, including Powell’s successor, until the matter is resolved.
The probe echoes other criminal inquiries reportedly targeting perceived political opponents of Trump, including New York Attorney General Letitia James, Sen. Adam Schiff, and former FBI Director James B. Comey. However, past efforts to convict these figures have largely failed, with federal judges dismissing prosecutions or disqualifying politically motivated prosecutors.
Powell emphasized that the criminal inquiry would not affect his service as Fed chair, whose term ends in May. The Justice Department has declined to comment on ongoing investigations, while the Supreme Court is set to hear a related case involving Fed Board member Lisa Cook, who faces unproven allegations of mortgage fraud.
The Washington Post noted that Trump’s actions represent an unusual challenge to the central bank’s independence, a principle designed by Congress to protect interest rate decisions from political interference and maintain long-term economic stability. Historically, presidents have pressured Fed chairs behind the scenes, but Trump’s public threats to fire Powell mark a rare escalation in U.S. history.
