Fed Chair Jerome Powell is the subject of a US Justice Department investigation regarding Senate testimony
Federal prosecutors are looking into Federal Reserve Chair Jerome Powell as tensions with President Donald Trump over interest rates escalate.
The US Justice Department has initiated a criminal investigation into Federal Reserve Chairman Jerome Powell, signaling a significant increase in tensions between the central bank and President Donald Trump.
Powell revealed the investigation on Sunday, stating that federal prosecutors had issued subpoenas to the Federal Reserve and suggested the potential for criminal charges related to his testimony before a Senate committee concerning renovations to Fed buildings.
He characterized the investigation as “unprecedented” and implied that it was driven by political motives, highlighting ongoing conflicts with Trump regarding monetary policy and his unwillingness to lower interest rates despite continuous public pressure from the White House.
“This concerns the ability of the Federal Reserve to set interest rates grounded in evidence and economic conditions, as opposed to being influenced by political pressure or intimidation,” Powell stated.
The Fed chair emphasized his regard for the rule of law while cautioning that the investigation should be considered in light of what he referred to as ongoing threats to the independence of the central bank.
Trump stated that he was not informed about the Justice Department’s actions, yet he reiterated his criticism of Powell’s leadership. “He’s definitely not skilled at the Fed, and he’s not adept at constructing buildings,” the president stated.
The Justice Department has yet to publicly confirm the investigation. The New York Times reports that the investigation is under the supervision of the US Attorney’s Office for the District of Columbia.
The decision follows Trump’s ongoing conflict with Powell, whom he appointed as Fed chair in 2017, yet has consistently criticized for his management of interest rate policy. Despite the Fed implementing three rate cuts in the latter half of 2025, Trump contends that these reductions were inadequate and has attributed high consumer costs to interest rates.
Critics caution that attempts to investigate or dismiss Powell may jeopardize the independence of the Federal Reserve. Senator Thom Tillis, a Republican from North Carolina, stated that he would stand against any nominee from Trump for the Fed Board until the legal issue is settled.
“If there were any lingering uncertainty regarding the intentions of advisers within the Trump administration to undermine the independence of the Federal Reserve, it should now be entirely dispelled,” Tillis stated.
Democratic Senator Elizabeth Warren has charged that Trump is trying to oust Powell to place a loyalist in the position. “This committee ought to refrain from advancing any Trump nominee for the Fed,” she stated.
The investigation continues a trend of unsuccessful criminal cases initiated during Trump’s presidency against political figures, such as former FBI Director James Comey and New York Attorney General Letitia James, which courts have dismissed for lacking merit.
