Federal Reserve Chair Jerome Powell disclosed Sunday evening that the Department of Justice (DOJ) served the central bank with grand jury subpoenas Friday, threatening criminal charges related to his June testimony before the Senate Banking Committee about the Fed’s headquarters renovation.
In an unusual video statement, Powell acknowledged that no one is above the law but characterized the action as part of a broader pattern of threats and pressure from the administration.
The renovation project’s cost has increased from $1.9 billion to $2.5 billion, and Powell faced questioning about the overruns during Senate hearings last summer. However, Powell suggested the investigation has an ulterior motive.
Powell stated the threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on evidence and economic conditions rather than following presidential preferences.
President Trump told NBC News Sunday he knew nothing about the Justice Department probe but criticized Powell’s performance as Fed chair. Trump, who appointed Powell during his first term, has repeatedly attacked the Fed chair for not cutting interest rates more aggressively.
The investigation has drawn bipartisan criticism from Congress. Senator Thom Tillis, a North Carolina Republican, said the action removes any remaining doubt whether Trump administration advisers are actively pushing to end Federal Reserve independence. Tillis pledged to oppose confirmation of any Trump Fed nominee until the legal matter is resolved.
Senate Minority Leader Chuck Schumer characterized the investigation as typical Trump administration bullying of independent officials who refuse to fall in line.
The Justice Department has also been investigating mortgage fraud allegations against Fed Governor Lisa Cook, who has repeatedly denied the claims. As a governor, Cook maintains a permanent vote on interest rate decisions.
A Justice Department spokesperson said the attorney general has instructed U.S. attorneys to prioritize investigating abuse of taxpayer dollars. The Federal Reserve, however, is funded through fees on banking services and investment income from its bond portfolio, not taxpayer money.
Powell’s term as Fed chair ends in May, though he will remain a Fed governor until January 2028. The investigation may increase the likelihood that Powell remains on the governing board to defend the institution’s independence.
