US Federal Reserve Board Chairman Jerome Powell speaks throughout a information convention following a Federal Open Market Committee (FOMC) assembly in Washington, DC, on Dec. 10, 2025.
Saul Loeb | AFP | Getty Photos
Federal prosecutors are conducting a prison investigation of Federal Reserve Chairman Jerome Powell centered on the $2.5 billion renovation to the central financial institution’s headquarters in Washington, D.C., and his associated testimony to Congress, he stated on Sunday night.
Powell stated the probe is the results of longstanding frustration by President Donald Trump over the Fed’s refusal to chop rates of interest as rapidly and as a lot because the president has demanded.
“The specter of prison prices is a consequence of the Federal Reserve setting rates of interest based mostly on our greatest evaluation of what is going to serve the general public, relatively than following the preferences of the President,” Powell stated in a video assertion tweeted by the Fed’s X account.
The chairman warned that the end result of the investigation will decide the way forward for the central financial institution’s choices.
“That is about whether or not the Fed will be capable of proceed to set rates of interest based mostly on proof and financial circumstances — or whether or not as a substitute financial coverage shall be directed by political strain or intimidation,” Powell stated.
Inventory futures fell on the heels of Powell’s assertion.
Powell stated the Division of Justice on Friday served the Fed “with grand jury subpoenas threatening a prison indictment associated to my testimony earlier than the Senate Banking Committee final June.”
“That testimony involved, partially, a multi-year undertaking to renovate historic Federal Reserve workplace buildings,” he stated.
The specter of indictment, Powell stated, “isn’t about my testimony final June or in regards to the renovation of the Federal Reserve buildings.”
U.S. President Donald Trump seems at Federal Reserve Chair Jerome Powell holding a doc throughout a tour of the Federal Reserve Board constructing, which is at present present process renovations, in Washington, D.C., U.S., July 24, 2025.
Kent Nishimura | Reuters
“It’s not about Congress’s oversight function; the Fed, via testimony and different public disclosures, made each effort to maintain Congress knowledgeable in regards to the renovation undertaking,” he stated. “These are pretexts.”
“I’ve deep respect for the rule of legislation and for accountability in our democracy,” Powell stated in his assertion.
“Nobody, definitely not the chair of the Federal Reserve, is above the legislation, however this unprecedented motion ought to be seen within the broader context of the administration’s threats and ongoing strain.”
“I’ve served on the Federal Reserve beneath 4 administrations, Republicans and Democrats alike,” Powell stated.
“In each case, I’ve carried out my duties with out political worry or favor, centered solely on our mandate of worth stability and most employment,” he stated. “Public service typically requires standing agency within the face of threats. I’ll proceed to do the job the Senate confirmed me to do, with integrity and a dedication to serving the American folks.”
The New York Instances first reported the probe, citing officers briefed on the matter.
The probe got here to mild practically six months after Rep. Anna Paulina Luna, R-Fla., first stated she had referred Powell to the DOJ for the potential crimes of perjury and false statements to federal officers in connection along with his testimony in regards to the renovation undertaking for the Fed’s headquarters.
“I laid out, intimately, how Jerome Powell lied beneath oath to Congress and misrepresented information in official communications to senior administration officers, together with OMB Director Russell Vought,” Luna stated in a tweet on Sunday. “Unelected bureaucrats don’t get a free go. That is precisely why oversight exists, and I’m grateful the @DOJ is taking this severely. Nobody is above the legislation.
An individual aware of the investigation instructed CNBC that they’d not dispute the concept the probe of Powell is said to the constructing renovation and his testimony to Congress.
The investigation is being overseen by the U.S. Legal professional’s Workplace for the District of Columbia, in response to the newspaper.
That workplace is led by U.S. Legal professional Jeanine Pirro, a former New York state prosecutor and Fox Information host, who was appointed to her publish by Trump.
Trump, in an interview with NBC Information on Sunday night, stated, “I do not know something about it,” referring to the prison probe of Powell.
“However he is definitely not superb on the Fed, and he is not superb at constructing buildings,” Trump instructed the information outlet.
Trump has repeatedly blasted Powell for the Fed not reducing rates of interest as a lot and as rapidly because the president has demanded since getting into the White Home in January 2025.
However the president instructed NBC on Sunday that the DOJ’s subpoenas wouldn’t have something to do with rates of interest, in response to the outlet.
“No. I would not even consider doing it that method,” Trump stated. “What ought to strain him is the truth that charges are far too excessive. That is the one strain he is obtained.”
U.S. President Donald Trump speaks to the media throughout a tour of the Federal Reserve Board constructing, which is at present present process renovations, in Washington, D.C., U.S., July 24, 2025.
Kent Nishimura | Reuters
A DOJ spokesperson, in an announcement to CNBC, with out saying the remark was about Powell, stated, “The Legal professional Normal has instructed her US Attorneys to prioritize investigating any abuse of taxpayer {dollars}.”
Trump has made no secret of his intention to take away Powell as chair after his time period expires in Might.
The 2 main contenders are believed to be former Fed Gov. Kevin Warsh and Kevin Hassett, the present director of the Nationwide Financial Council.
Sen. Thom Tillis, a North Carolina Republican and a member of the Senate Banking Committee, blasted the investigation of Powell and stated that he would oppose the nomination of Powell’s alternative by Trump, and some other Fed Board nominee, “till this authorized matter is absolutely resolved.”
“If there have been any remaining doubt whether or not advisers inside the Trump Administration are actively pushing to finish the independence of the Federal Reserve, there ought to now be none,” Tillis stated in an announcement.
“It’s now the independence and credibility of the Division of Justice which are in query,” the senator stated.
Senate Minority Chief Chuck Schumer, a New York Democrat, stated Trump’s “assault on the Fed’s independence continues,” including that the president is threatening the power and stability of the U.S. financial system.
“That is the form of bullying that we have all come to anticipate from Donald Trump and his cronies. Anybody who’s impartial and would not simply fall in line behind Trump will get investigated,” Schumer stated in an announcement. “Jay Powell and the Fed aren’t the explanation Trump’s financial system and his ballot numbers are in the bathroom. If he is on the lookout for the one who prompted that he ought to look within the mirror.”
Sen. Elizabeth Warren of Massachusetts, the rating Democrat on the Banking Committee, echoed Tillis.
“As Donald Trump prepares to appoint a brand new Fed Chair, he needs to push Jerome Powell off the Fed Board for good and set up one other sock puppet to finish his corrupt takeover of America’s central financial institution,” Warren stated in an announcement.
“Trump is abusing the authorities of the Division of Justice like a wannabe dictator so the Fed serves his pursuits, alongside along with his billionaire mates,” Warren stated.
“This Committee and the Senate mustn’t transfer ahead with any Trump nominee for the Fed, together with Fed Chair.”
Brian Jacobsen, chief financial strategist at Annex Wealth Administration, in a observe to purchasers on Sunday, wrote, “President Trump is attempting to carry prison prices towards Powell associated to his testimony earlier than Congress in regards to the Fed’s headquarters renovation.”
“Powell could protest by staging a sit-in. His time period as Chair is up in Might, however his time period as a governor is not up till January 2028,” Jacobsen wrote.
“With the political strain on the Fed, he could select to remain on as a governor out of spite. It could deprive President Trump of the power to stack the board with one other appointee,” Jacobsen wrote. “Stephen Miran’s time period is up in January 2026 and that could be the one emptiness Trump will get to fill. It could be unconventional for Powell to remain on, however the whole lot lately is unconventional.”
Trump nominated Powell to the Fed chair place in 2017; he was confirmed in 2018.
However virtually from the onset of Powell’s time period, Trump has repeatedly badgered the Fed chair about rates of interest.
At varied instances, Trump has referred to as Fed officers “boneheads” and as soon as referred to Powell as a golfer who can’t putt.
These criticisms intensified throughout Trump’s second time period, as he hectored the central financial institution to chop charges for months, even after it carried out three consecutive quarter-percentage-point reductions starting in September.
Throughout that point, Trump put in his handpicked alternative, Miran, as a Fed governor and has sought to take away one other governor, Lisa Cook dinner, from the board over allegations that she dedicated mortgage fraud.
Cook dinner denies these claims, which have been made within the type of prison referrals to the DOJ by Federal Housing Finance Company Director Invoice Pulte, who has been an assault canine towards perceived enemies of Trump, who appointed Pulte to his publish.
The Supreme Courtroom is about to listen to arguments on a case difficult Cook dinner’s elimination later in January.
Krishna Guha, vice chairman of Evercore ISI and head of its World Coverage and Central Financial institution Technique Staff, in a observe to purchasers on the probe of Powell, stated, “We’re surprised by this deeply disturbing improvement which got here out of the blue after a interval wherein tensions between Trump and the Fed gave the impression to be contained.”
“We anticipate the greenback, bonds and shares to all fall in Monday buying and selling in a sell-America commerce much like that in April final 12 months on the peak of the tariff shock and earlier risk to Powell’s place as Fed chair, with world traders making use of a better threat premium to US property,” Guha stated. “Gold and different secure havens ought to rally.”
— CNBC’s Jeff Cox, Eamon Javers, and Garrett Downs contributed to this text
