Fed Chair Powell Responds to DOJ Criminal Investigation

• Powell says DOJ probe over Fed renovation threatens interest rate independence at Fed.
• Subpoenas examine Powell’s Senate testimony and a $2.5B headquarters renovation.
• Investigation fuels political backlash as Trump criticizes rates and Fed leadership.

Federal Reserve Chair Jerome Powell addressed a criminal investigation on Sunday evening after federal prosecutors issued grand jury subpoenas to the central bank in Washington. The probe focuses on a $2.5 billion renovation of historic Fed buildings and Powell’s Senate testimony last June. Powell said the Justice Department acted on Friday and warned the dispute centers on interest rate independence.

DOJ Subpoenas and the Renovation Focus

Powell said the Department of Justice served subpoenas related to his testimony before the Senate Banking Committee. That testimony discussed a multiyear renovation of Federal Reserve headquarters buildings in Washington, D.C. The project carries an estimated cost of $2.5 billion, according to the Fed.

Notably, Powell said the investigation does not center on renovation disclosures or congressional oversight. He said the Fed provided testimony and public updates to keep Congress informed. However, he described the renovation issue as a pretext for the probe.

Powell delivered his remarks in a recorded statement posted on the Federal Reserve’s X account Sunday evening. He said no official, including the Fed chair, stands above the law. However, he described the subpoenas as unprecedented.

According to CNBC, federal prosecutors are examining whether Powell’s Senate testimony created legal exposure. The investigation is overseen by the U.S. Attorney’s Office for the District of Columbia. That office is led by Jeanine Pirro, a former New York state prosecutor and Fox News host appointed by President Donald Trump.

Powell Cites Rate Policy Tensions With White House

Turning to motive, Powell linked the investigation to disputes over monetary policy. He said the threat of criminal charges followed the Fed’s refusal to cut interest rates quickly. President Trump has publicly criticized Powell since taking office in January 2025.

Powell said the Fed sets rates based on evidence and economic conditions. He said political pressure should not direct monetary policy decisions. However, he warned the investigation could affect the Fed’s future independence.

He also noted his service under four administrations, including Republican and Democratic presidents. Powell said he carried out his duties without political favor. He added that public service sometimes requires standing firm under pressure.

Trump addressed the investigation during a Sunday interview with NBC News. He said he knew nothing about the probe. However, he criticized Powell’s performance at the Fed and the renovation project.

Trump said the subpoenas did not relate to interest rate decisions. He said pressure on Powell should come from what he called high rates. Previously, Trump criticized renovation costs and said he wanted Powell removed.

Related: Hassett Faces Pushback as Warsh Rises in Fed Chair Race

Political Reaction and DOJ Response

Meanwhile, the Justice Department issued a brief statement through a spokesperson. Without naming Powell, the spokesperson said the Attorney General instructed prosecutors to prioritize investigations involving taxpayer dollars. The statement did not address the Fed renovation directly.

Political reaction followed quickly. North Carolina Senator Thom Tillis expressed concern about the investigation’s implications. Tillis sits on the Senate Banking Committee, which oversees Federal Reserve nominations.

Tillis said he would oppose future Fed nominees until the legal matter concludes. He said the episode raises questions about the Justice Department’s independence. He also said doubts about efforts to end Fed independence should now be resolved.

The investigation adds to a pattern of prosecutions involving perceived presidential adversaries. Trump has publicly urged prosecutions of political opponents in recent months. Such actions have raised concerns about institutional guardrails.

Powell said he plans to continue serving as Fed chair. He said he will carry out the role the Senate confirmed him to perform. He emphasized integrity, accountability, and service to the American public.

The Justice Department probe remains ongoing under the U.S. Attorney’s Office in Washington. Powell said the outcome will shape how the Fed sets interest rates. He reiterated that decisions should follow data rather than political intimidation.

Meanwhile, Powell confirmed receipt of subpoenas tied to renovation testimony and interest rate disputes. He connected the investigation to tensions with President Trump over monetary policy. Federal prosecutors continue reviewing the renovation project and Powell’s congressional statements.