- Federal Reserve Chair Jerome Powell is facing a federal criminal inquiry concerning the $2.5 billion renovation of the central bank’s headquarters and his statements before Congress regarding the project, according to Powell.
- Powell stated that the investigation stemmed from the Federal Reserve “adjusting interest rates according to our most accurate judgment of what benefits the public, instead of adhering to the desires of” President Donald Trump.
- Senator Thom Tillis, a Republican from North Carolina and member of the Banking Committee, stated he would oppose any nominee proposed by Trump to replace Powell, as well as any Federal Reserve board candidate, “until this legal issue is completely settled.”
Federal authorities are carrying out a criminal inquiry intoFederal Reserve Chairman Jerome Powell focused on the $2.5 billion upgrade of the central bank’s main office buildingin Washington, D.C., and his testimony before Congress, he stated on Sunday evening.
Powell stated that the investigation stems from long-standing frustration on the part of the president.Donald Trump over the Fed’s refusal to cut interest ratesas quickly and as extensively as the president has requested.
“The risk of legal action arises from the Federal Reserve determining interest rates according to our best judgment of what benefits the public, rather than adhering to the President’s desires,” Powell stated in a.video statementtweeted by the Fed’s X account.
The chairman cautioned that the results of the inquiry will influence the central bank’s future actions.
“This concerns whether the Federal Reserve will be able to determine interest rates using data and economic factors — or if monetary policy will be influenced by political pressure or coercion,” Powell stated.
Powell said the Department of Justiceon Friday, the Fed was served with grand jury subpoenas that threatened a criminal indictment concerning my testimony before the Senate Banking Committee in June.
That statement addressed, in part, a long-term initiative spanning several yearsrebuild old Federal Reserve office structures modernize historical Federal Reserve office facilities update vintage Federal Reserve office buildings revitalize aged Federal Reserve office structures restore and update historic Federal Reserve office buildings enhance traditional Federal Reserve office premises reconstruct old Federal Reserve office buildings upgrade the infrastructure of historic Federal Reserve office buildings redevelop historical Federal Reserve office structures renovate and upgrade former Federal Reserve office buildings,” he said.
The risk of being charged, Powell stated, “has nothing to do with my testimony from last June or the renovation of the Federal Reserve buildings.”
It’s not related to Congress’s oversight responsibilities; the Fed, through testimony and other public releases, did everything possible to inform Congress about the renovation project,” he stated. “Those are just excuses.
“I hold a strong respect for the rule of law and for responsibility within our democratic system,” Powell stated in his remarks.
No one, especially not the head of the Federal Reserve, is exempt from the law, but this unusual move must be understood within the larger framework of the administration’s warnings and continuous pressure.
“I have worked at the Federal Reserve during the tenure of four different administrations, both Republican and Democratic,” Powell stated.
In all instances, I have fulfilled my responsibilities without political bias or preference, concentrating exclusively on our mission of maintaining stable prices and achieving maximum employment,” he stated. “Public service occasionally involves holding your ground despite challenges. I will keep performing the role that the Senate approved me for, with honesty and a dedication to aiding the American people.
The New York Times initially reportedthe probe, referencing officials who are informed about the issue.
Stock futures fellfollowing Powell’s remarks.
A person involved in the investigation stated that they would not challenge the notion that the inquiry into Powell is connected to the building’s renovation and his congressional testimony.
The inquiry is being monitored by the U.S. Attorney’s Office in the District of Columbia, as reported by the newspaper.
That office is headed by U.S. Attorney Jeanine Pirro, a former prosecutor in New York state and a Fox News commentator, who was selected for her position by Trump.
Trump, during an interview withNBC NewsOn Sunday night, he stated, “I am unaware of any details regarding it,” in reference to the legal investigation involving Powell.
“But he definitely isn’t doing a great job at the Federal Reserve, and he’s not skilled at constructing buildings,” Trump said to the news organization.
Trump has consistently criticized Powell for the Federal Reserve not reducing interest rates sufficiently and promptly, as the president has repeatedly requested since taking office in January 2025.
However, the president stated to NBC on Sunday that the DOJ’s subpoenas are unrelated to interest rates, as reported by the source.
No. I wouldn’t consider approaching it in that manner,” Trump stated. “The key factor that should influence him is the fact that interest rates are excessively high. That is the sole leverage he has.
A representative from the Department of Justice, in a statement to [media outlet], did not explicitly mention Powell but stated, “The Attorney General has directed her U.S. Attorneys to focus on examining any misuse of public funds.”
Trump has not hidden his plan to replace Powell as chair once his term ends in May.
The top two candidates are thought to be former Federal Governor.Kevin Warsh and Kevin Hassett, the current head of the National Economic Council.
Sen. Thom Tillis, a Republican from North Carolina and a member of the Senate Banking Committee, criticized the investigation of Powell and stated he would oppose Trump’s nomination of Powell’s successor, as well as any other Federal Reserve Board nominee, “until this legal issue is completely settled.”
“If there was any lingering uncertainty about whether advisors in the Trump Administration are working to undermine the Federal Reserve’s independence, that should now be cleared up,” Tillis stated in a release.
“The integrity and autonomy of the Department of Justice are now being called into question,” the senator stated.
Senate Minority Leader Chuck Schumer, a New York Democrat, stated that Trump’s “attack on the Federal Reserve’s independence persists,” noting that the president is endangering the robustness and stability of the U.S. economy.
This is the type of bullying we’ve all grown accustomed to from Donald Trump and his associates. Anyone who is independent and doesn’t simply follow Trump’s lead ends up being investigated,” he stated. “Jay Powell and the Federal Reserve are not responsible for Trump’s struggling economy or his poor approval ratings. If he’s searching for the cause, he should look in the mirror.
Sen. Elizabeth Warrena Democrat from Massachusetts, the ranking member of the Banking Committee, echoed Tillis.
“As Donald Trump gets ready to appoint a new Federal Reserve Chair, he aims to remove Jerome Powell from the Fed Board permanently and replace him with another puppet to finish his corrupt takeover of America’s central bank,” Warren stated in a release.
“Trump is misusing the powers of the Department of Justice as if he were a would-be dictator, with the Fed aligning with his interests and those of his billionaire allies,” Warren stated.
The Committee and the Senate ought to refrain from proceeding with any Trump candidate for the Federal Reserve, including the Fed Chair.
Brian Jacobsen, the chief economic strategist at Annex Wealth Management, stated in a message to clients on Sunday, “President Trump is attempting to file criminal charges against Powell concerning his testimony before Congress regarding the Federal Reserve’s headquarters renovation.”
Powell could object by organizing a sit-in. His tenure as Chair ends in May, but histhe position of governor will not be available until January 2028,” Jacobsen wrote.
“Amid the political pressure on the Fed, he might decide to remain as a governor out of resentment. This would prevent President Trump from adding another nominee to the board,” Jacobsen wrote.Stephen MiranHis term ends in January 2026, and that could be the sole opening Trump has to fill. It would be unusual for Powell to remain, but nothing these days is typical.
In 2017, Trump selected Powell for the role of Fed chair, and he received approval in 2018.
However, from the beginning of Powell’s tenure, Trump has consistently pressured the Fed chairman regarding interest rates.
Throughout different periods, Trump has labeled Federal Reserve officials as “fools” and at one point described Powell as a golfer who lacks putting skills.
Those critiques grew stronger throughout Trump’s second term, as he repeatedly urged the central bank to lower interest rates for months, despite the fact that it had already made three consecutive quarter-point cuts starting in September.
At that time, Trump appointed his preferred candidate, Miran, as a Fed governor and has attempted to remove another governor,Lisa Cook, from the board over claims that she engaged in mortgage fraud.
Cook refutes these allegations, which were presented as criminal referrals to the DOJ byFederal Housing Finance Agency Director , who has acted as a fierce critic of Trump’s perceived adversaries, who appointed Pulte to his position.
The Supreme Court will listen to arguments regarding a case that contests Cook’s dismissal in late January.
Krishna Guha, the vice chairman of Evercore ISI and leader of its Global Policy and Central Bank Strategy Team, expressed in a message to clients regarding the investigation into Powell, “We are shocked by this very troubling event that emerged unexpectedly following a time when tensions between Trump and the Fed appeared to be under control.”
We anticipate that the dollar, bonds, and stocks will all decline during Monday’s trading in a sell-America scenario akin to the one seen in April last year at the height of the tariff crisis and prior to the earlier threat to Powell’s role as Fed chair, with global investors demanding a greater risk premium for US assets,” Guha stated. “Gold and other safe havens are expected to rise.
— ‘sJeff Cox, Eamon Javers, and Garrett Downs contributed to this article