US Federal Reserve Board Chairman Jerome Powell speaks throughout a information convention following a Federal Open Market Committee (FOMC) assembly in Washington, DC, on Dec. 10, 2025.
Saul Loeb | AFP | Getty Photographs
Federal prosecutors have opened a felony investigation of Federal Reserve Chairman Jerome Powell associated to the $2.5 billion renovation to the central financial institution’s headquarters in Washington, D.C., he confirmed on Sunday night.
Powell mentioned the acknowledged focus of a felony probe is a pretext, and that he’s truly being investigated on account of Fed “setting rates of interest primarily based on our greatest evaluation of what’s going to serve the general public, moderately than following the preferences of” President Donald Trump.
Trump has repeatedly demanded that the Fed minimize rates of interest and has attacked Powell personally when it has failed to take action.
“That is about whether or not the Fed will have the ability to proceed to set rates of interest primarily based on proof and financial circumstances — or whether or not as an alternative financial coverage can be directed by political strain or intimidation,” Powell mentioned in a video assertion tweeted by the Fed’s X account.
On Friday “the Division of Justice served the Federal Reserve with grand jury subpoenas threatening a felony indictment associated to my testimony earlier than the Senate Banking Committee final June,” Powell mentioned.
“That testimony involved partly, a multi-year venture to renovate historic Federal Reserve workplace buildings,” he mentioned.
Inventory futures fell on the heels of Powell’s assertion.
An individual accustomed to the investigation instructed CNBC that they might not dispute the concept the probe of Powell is expounded to the constructing renovation and his testimony to Congress.
“I’ve deep respect for the rule of regulation and for accountability in our democracy,” Powell mentioned in his assertion.
Nobody, definitely not the chair of the Federal Reserve is above the regulation, however this unprecedented motion must be seen within the broader context of the administration’s threats and ongoing strain.”
“This new menace will not be about my testimony final June or concerning the renovation of the Federal Reserve buildings,” he mentioned. “It’s not about Congress’s oversight position; the Fed by way of testimony and different public disclosures made each effort to maintain Congress knowledgeable concerning the renovation venture. These are pretexts.”
U.S. President Donald Trump appears to be like at Federal Reserve Chair Jerome Powell holding a doc throughout a tour of the Federal Reserve Board constructing, which is at the moment present process renovations, in Washington, D.C., U.S., July 24, 2025.
Kent Nishimura | Reuters
The New York Occasions first reported the probe, citing officers briefed on the matter.
The investigation is being overseen by the U.S. Lawyer’s Workplace for the District of Columbia, based on the newspaper.
That workplace is led by U.S. Lawyer Jeanine Pirro, a former New York state prosecutor and Fox Information host, who was appointed to her put up by Trump.
Trump, in an interview with NBC Information on Sunday night, mentioned, “I do not know something about it,” referring to the felony probe of Powell.
“However he is definitely not excellent on the Fed, and he isn’t excellent at constructing buildings,” Trump instructed the information outlet.
Trump has repeatedly blasted Powell for the Fed not slicing rates of interest as a lot and as rapidly because the president has demanded since getting into the White Home in January 2025.
However the president instructed NBC on Sunday, that the DOJ’s subpoenas wouldn’t have something to do with rates of interest, based on the outlet.
“No. I would not even consider doing it that manner,” Trump mentioned. “What ought to strain him is the truth that charges are far too excessive. That is the one strain he is received.”
U.S. President Donald Trump speaks to the media throughout a tour of the Federal Reserve Board constructing, which is at the moment present process renovations, in Washington, D.C., U.S., July 24, 2025.
Kent Nishimura | Reuters
The White Home referred questions concerning the probe to the DOJ.
A DOJ spokesperson, in an announcement to CNBC, with out saying the remark was about Powell, mentioned, “The Lawyer Basic has instructed her US Attorneys to prioritize investigating any abuse of taxpayer {dollars}.”
Trump has made no secret he intends to take away Powell as chair after his time period expires in Might.
The 2 main contenders are believed to be former Governor Kevin Warsh and Kevin Hassett, the present director of the Nationwide Financial Council.
Sen. Thom Tillis, a North Carolina Republican, and a member of the Senate Banking Committee, blasted the investigation of Powell and mentioned that he would oppose the nomination of Powell’s substitute by Trump, and every other Fed Board nominee, “till this authorized matter is absolutely resolved.”
“If there have been any remaining doubt whether or not advisers throughout the Trump Administration are actively pushing to finish the independence of the Federal Reserve, there ought to now be none,” Tillis mentioned in an announcement.
“It’s now the independence and credibility of the Division of Justice which are in query,” the senator mentioned.
Sen. Elizabeth Warren of Massachusetts, the rating Democrat on the Banking Committee, echoed Tillis.
“As Donald Trump prepares to appoint a brand new Fed Chair, he needs to push Jerome Powell off the Fed Board for good and set up one other sock puppet to finish his corrupt takeover of America’s central financial institution.” Warren mentioned in an announcement.
“Trump is abusing the authorities of the Division of Justice like a wannabe dictator so the Fed serves his pursuits, alongside together with his billionaire mates,” Warren mentioned. “This Committee and the Senate mustn’t transfer ahead with any Trump nominee for the Fed, together with Fed Chair.”
Brian Jacobsen, chief financial strategist at Annex Wealth Administration, in a notice to shoppers on Sunday, wrote, “President Trump is making an attempt to convey felony prices towards Powell associated to his testimony earlier than Congress concerning the Fed’s headquarters renovation.”
“Powell might protest by staging a sit-in. His time period as Chair is up in Might, however his time period as a governor is not up till January 2028,” Jacobsen wrote.
“With the political strain on the Fed, he might select to remain on as a governor out of spite. It could deprive President Trump of the flexibility to stack the board with one other appointee,” Jacobsen wrote. “Stephen Miran‘s time period is up in January 2026 and which may be the one emptiness Trump will get to fill. It could be unconventional for Powell to remain on, however every part today is unconventional.”
Trump nominated Powell to the Fed chair place in 2017; he was confirmed in 2018.
However nearly from the onset of Powell’s time period, Trump has repeatedly badgered the Fed chair about rates of interest.
At numerous occasions, Trump has known as Fed officers “boneheads” and as soon as referred to Powell as a golfer who can not putt.
These criticisms intensified throughout Trump’s second time period, as he hectored the central financial institution to chop charges for months till and even after it applied three consecutive quarter-percentage-point reductions starting in September.
Throughout that point, Trump put in his hand-picked alternative, Miran, as a Fed governor, and has sought to take away one other governor, Lisa Prepare dinner, from the board over allegations she dedicated mortgage fraud.
Prepare dinner denies these claims, which have been made within the type of felony referrals to the DOJ by Federal Housing Finance Company Director Invoice Pulte, who has been an assault canine towards perceived enemies of Trump, who appointed Pulte to his put up.
The Supreme Court docket is ready to listening to arguments on a case difficult Prepare dinner’s elimination later in January.
Krishna Guha, vice chairman of Evercore ISI and head of its International Coverage and Central Financial institution Technique Group, in a notice to shoppers on the probe of Powell, mentioned, “We’re surprised by this deeply disturbing improvement which got here out of the blue after a interval during which tensions between Trump and the Fed gave the impression to be contained.”
“We count on the greenback, bonds and shares to all fall in Monday buying and selling in a sell-America commerce just like that in April final 12 months on the peak of the tariff shock and earlier menace to Powell’s place as Fed chair, with international buyers making use of a better threat premium to US property,” Guha mentioned. “Gold and different secure havens ought to rally.”
— CNBC’s Jeff Cox, Eamon Javers, and Garrett Downs contributed to this text
