US Federal Reserve Chairman says Justice Department has threatened him with criminal prosecution

The Trump administration has threatened to indict Federal Reserve Chairman Jerome Powell over congressional testimony he gave last summer about the Fed building project, which Powell has called a “pretext” to gain greater influence over the central bank and monetary policy.

The development had immediate implications for U.S. President Donald Trump’s long-running effort to exert greater control over the Fed, said Republican Senator Thom Tillis, a member of the Senate Banking Committee, which vets presidential nominees for the Fed. said in a statement That the threatened indictment on X raises questions about the “independence and credibility” of the Justice Department.

Tillis said he would oppose any Trump nominee to the Fed, including the president’s choice for a new chair, “until this legal matter is fully resolved.”

Powell disclosed the subpoenas and threats in a statement Sunday night.

“On Friday, the Department of Justice served the Federal Reserve with a grand jury subpoena threatening criminal indictments related to my testimony before the Senate Banking Committee last June,” Powell said in a statement Sunday.

“I have a deep respect for the rule of law and accountability in our democracy. No one – certainly not the Chairman of the Federal Reserve – is above the law,” Powell said in a brief statement released by the Fed late Sunday.

“But this unprecedented action must be viewed in the broader context of the administration’s threats and ongoing pressure for lower interest rates,” he said.

Trump told NBC News on Sunday that he had no knowledge of the Justice Department’s action.

“I don’t know anything about it, but he’s certainly not very good at the Fed, and he’s not very good at building buildings,” Trump said.

Powell is among several officials and politicians whom Trump considers opponents who faced impeachment or the threat of prosecution in the past year. These include Trump’s former national security advisor John Bolton, former FBI Director James Comey, New York Attorney General Letitia James and Democratic Senator Adam Schiff of California.

Trump has also sought to fire Fed Governor Lisa Cook, an unprecedented move, although she has sued to keep her job and courts have ruled that she can remain in her seat while the case plays out. The Supreme Court will hear arguments in that case on January 21.

During his 2024 presidential campaign, Trump railed against the politicization of the Justice Department, as he faced two criminal indictments that were never heard – one for illegally possessing classified documents and the other for criminal conspiracy to prevent the certification of his 2020 election loss.

Trump has sought to sharply cut the Fed’s rates since resuming office in January, blaming its policy for stalling the economy and thinking about firing Powell despite legal protection from removing the Fed chair.

A Justice Department spokesperson declined to comment on the case, but said: “The Attorney General has directed his U.S. Attorneys to prioritize investigations of any misuse of taxpayer dollars.”

‘Low point’ in presidency, historians say

The independence of central banks, at least in setting interest rates to control inflation, is considered a central principle of sound economic policy, shielding monetary policymakers from short-term political considerations and allowing them to focus on long-term efforts to keep prices relatively stable.

Fed historian Peter Conti-Brown of the University of Pennsylvania said Powell’s investigation could trigger market turmoil and “is a low point for the Trump presidency and a low point in the history of central banking in the US.”

“Congress did not design the Fed to reflect the daily fluctuations of the President, and because the Fed has rejected President Trump’s efforts to take down the Fed, he is bringing the full weight of US criminal law against its president.”

Trump promoted Powell to the position of chairman during his first term, but he soon became angry with her and made his opinions clear in a series of reprimands and threats.

Powell, for his part, had largely refrained from commenting on the president’s actions or statements, instead acknowledging that the chief executive frequently expresses opinions on a variety of issues, and vowing, as he did in Sunday’s statement, “to continue to do the work to which the Senate has confirmed me.”

While Powell’s term as chair expires in May, he has the authority to remain on the Fed board of 19 policymakers until Jan. 31, 2028, barring the president from making an additional Fed appointment — which would be Trump’s fourth on the seven-member board — until the end of his term.

The White House early last year criticized the Fed’s $2.5 billion US renovation of two of its buildings in Washington as excessively expensive and ostentatious.

Look The Fed released a video last year to combat misinformation:https://www.youtube.com/watch?v=PPeSFE1Vc

At the time, some analysts called it an excuse for the Trump administration’s pressure campaign for lower interest rates, but Powell did not. Instead the Fed chair posted a detailed explanation of the work on the central bank’s website and sent letters to members of the Trump administration providing background.

In June, when Powell gave his usual twice-yearly testimony on monetary policy to Congress, he was repeatedly asked about the work, which he explained as necessary updates to aging infrastructure, both buildings dating back to the 1930s.

Sen. Tim Scott of South Carolina, chairman of that chamber’s Banking Committee, said the Fed’s building renovations include “roof terraces, custom elevators that open into VIP dining rooms, white marble finishes and even a private art collection.” Powell disputed those details in his testimony.

In July, Trump made a rare presidential visit to the site, and Powell gave him a tour. Fed staff also gave media tours that sought to highlight a number of costs that they said were largely out of their control: blast-resistant windows and other security upgrades, modern electronics and HVAC systems.