Fed chair Jerome Powell announces he is under criminal investigation

After months of attacks from U.S. President Donald Trump, the pressure on Federal Reserve Chair Jerome Powell has now escalated. Powell confirmed on Sunday that the U.S. Justice Department has opened a criminal investigation into him over renovation work at the institution’s headquarters in Washington. Federal prosecutors are investigating whether Powell lied during his appearance before Congress last summer to explain the details of the project, according to The New York Times.

“On Friday, the Department of Justice served the Federal Reserve with grand jury subpoenas threatening a criminal indictment related to my testimony before the Senate Banking Committee last June,” Powell announced on Sunday in an unusual video posted on the Federal Reserve’s X account. “That testimony concerned in part to a multi-year project to renovate historic Federal Reserve office buildings,” Powell stated.

Powell said the investigation is a response to his determination to preserve the institution’s independence and to refuse to bend to the wishes of Trump, who is demanding steeper interest-rate cuts. In the video, Powell stated: “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.”

In what is one of the most serious assaults on the Federal Reserve’s independence in its history, Trump has spent months attacking, insulting, and threatening to fire Powell, who was appointed Fed chair by the Republican tycoon himself during his first term in 2018. Trump wants rates cut more aggressively to stimulate the U.S. economy ahead of the midterm elections, where polls suggest Democrats could erode his power.

“I have deep respect for the rule of law and for accountability in our democracy. No one — certainly not the chair of the Federal Reserve — is above the law. But this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure,” the New York–based economist said.

Trump has called Powell “stupid,” “not very smart,” and “Too Late Powell.” He has threatened to fire him, but the president’s advisers explained that doing so would be legally difficult because of the Federal Reserve’s independence. Even so, Trump continues to raise the idea from time to time. Trump has also launched a process to select Powell’s successor. Powell’s term ends in May, and although Trump could reappoint him, he has chosen to sideline him instead.

Speaking solemnly, the Fed chair insisted: “This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions — or whether instead monetary policy will be directed by political pressure or intimidation.”

The U.S. Attorney’s Office for the District of Columbia, which covers the nation’s capital, is overseeing the investigation. The case file, which includes an analysis of Powell’s public statements and a review of spending records, was approved in November by Jeanine Pirro, a longtime Trump ally, according to several officials cited by The New York Times.

Despite repeated attacks by the Republican president, Powell had never previously referred to the insults or threats in his public remarks. “I have served at the Federal Reserve under four administrations, Republicans and Democrats alike. In every case, I have carried out my duties without political fear or favor, focused solely on our mandate of price stability and maximum employment.”

Trump visited the renovation site at the Federal Reserve’s headquarters on Constitution Avenue, just a few hundred meters from the White House, and criticized Powell over cost overruns. Powell publicly corrected him for misstating the figures. The renovation has cost $2.5 billion, with overruns of about $700 million, largely due to the construction of a parking facility for staff and a corridor linking the two main buildings. “Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people,” said Powell.

Powell is not the only Federal Reserve official facing a criminal investigation. The White House has also launched an investigation into Fed governor, Lisa Cook — appointed by Democrat Joe Biden and one of the 12 members of the Federal Open Market Committee, the body that sets interest rates — who has been among the most vocal critics of Trump’s interference.

The White House accused Cook of irregularities in the documentation of a mortgage loan, alleging that she listed two properties as primary residences in order to obtain more favorable financial terms. The accusation, presented without evidence, was accompanied by an unsigned statement from Trump calling for her dismissal. Although the document had no legal standing, it triggered a judicial process that is now before the Supreme Court. The court is expected to rule in late January on whether the president has the authority to dismiss Federal Reserve officials — a decision widely seen as historic, both for its impact on monetary policy and for how it will define the limits of presidential power.

Sign up for our weekly newsletter to get more English-language news coverage from EL PAÍS USA Edition