Federal prosecutors have initiated a criminal investigation into Federal Reserve Chairman Jerome Powell, who revealed the development in a video statement over the weekend. Powell indicated that the Justice Department sent subpoenas to the Federal Reserve and has allegedly suggested a potential criminal indictment concerning his testimony to a Senate committee about renovations to Federal Reserve buildings. Describing the situation as “unprecedented,” Powell asserted that the investigation could be a response to his refusal to lower interest rates under pressure from former President Donald Trump.
Powell emphasized the importance of maintaining the Federal Reserve’s independence, stating, “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.” He expressed a commitment to upholding the rule of law but criticized the investigation as part of a broader pattern of pressure from the Trump administration.
In response to the investigation, Trump stated he was unaware of any inquiries concerning Powell. Still, he voiced his disapproval of Powell’s leadership at the Federal Reserve, noting, “he’s certainly not very good at the Fed, and he’s not very good at building buildings.” This probe signifies an escalation in the ongoing conflict between Trump and Powell, whom Trump nominated as Fed chair in 2017. Trump has publicly threatened to dismiss Powell over his perceived failure to lower interest rates swiftly enough.
In the latter half of 2025, the Federal Reserve cut interest rates three times, yet Trump has continued to blame rising inflation and economic costs on his predecessor, President Joe Biden, and the Fed’s interest rate policies. Concerns have been raised by critics that Trump’s persistent pressure on Powell risks undermining the Federal Reserve’s autonomy in setting interest rates, an essential function insulated from political influence.
Republican Senator Thom Tillis of North Carolina, a member of the Senate Banking Committee, expressed his intent to oppose any nomination by Trump for Powell’s replacement or for other positions on the Fed Board until the legal matters surrounding Powell are resolved. He stated, “If there were any remaining doubt whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none,” underscoring concerns over the integrity of both the Federal Reserve and the Department of Justice.
Democratic Senator Elizabeth Warren criticized Trump’s actions, suggesting they are aimed at replacing Powell with a more compliant figure to facilitate what she described as a “corrupt takeover” of America’s central bank. Warren, too, called for a halt to any nominations by Trump for the Fed until the situation surrounding Powell has been clarified.
The investigation is being overseen by the US Attorney’s Office for the District of Columbia, with reports indicating that this development follows a pattern of scrutiny faced by political adversaries of Trump, including former FBI Director James Comey and New York Attorney General Letitia James. Comey faced allegations of making false statements and obstructing justice, charges that many, including Comey himself, have characterized as politically motivated.
As the investigation unfolds, the implications for the Federal Reserve and its autonomy in monetary policy remain a critical point of concern in the political landscape.
