- Federal prosecutors investigate Fed Chair Jerome Powell over Senate testimony on building renovations
- Powell calls the probe “unprecedented” and links it to Trump’s anger over interest rates
- Trump claims he has no knowledge of the investigation
Federal Reserve Chair Jerome Powell revealed on Sunday that federal prosecutors have launched a criminal investigation into him.
In an unusual disclosure, Powell said the U.S. Department of Justice (DoJ) had served the Federal Reserve with subpoenas and threatened criminal charges over testimony he gave to a Senate committee regarding renovations to Federal Reserve buildings.
Describing the investigation as “unprecedented,” Powell suggested it may have been triggered by former President Donald Trump’s frustration over the Fed’s refusal to cut interest rates despite repeated public pressure.
Trump, however, told NBC News that he did not “know anything” about the investigation.
Until now, the long-standing feud between Trump and Powell has largely been one-sided, with Trump frequently calling the Fed chair “Mr. Too Late” and a “numbskull.” Powell’s statement on Sunday marked the first time he publicly pushed back, warning that the probe threatens the independence of the U.S. central bank.
“This is about whether the Fed will continue to set interest rates based on evidence and economic conditions, or whether monetary policy will instead be dictated by political pressure or intimidation,” Powell said.
He added, “I have deep respect for the rule of law and accountability in our democracy. No one—not even the Fed chair—is above the law. But this unprecedented action should be seen in the broader context of ongoing threats and pressure from the administration.”
The Federal Reserve is currently undertaking its first major renovation of the Eccles and 1951 Constitution Avenue buildings since the 1930s. The overhaul includes modernisation and critical health and safety work, such as removing asbestos and lead. The Fed says the project will lower costs over time, though Trump has criticised the $3.1 billion projected cost, calling it higher than the Fed’s $2.5 billion estimate.
Powell, nominated as Fed chair by Trump in 2017, is scheduled to step down in May, with Trump expected to announce a successor by the end of the month. The DoJ investigation, however, could complicate the nomination process.
North Carolina Republican Senator Thom Tillis, a member of the Senate Banking Committee, said he would block Trump’s Fed nominees, including Powell’s replacement, until the legal matter is resolved. “If there were any doubt that advisers in the Trump administration are attempting to undermine Fed independence, there should be none now,” Tillis said.
Democratic Senator Elizabeth Warren argued that Trump aims to remove Powell permanently and install a compliant replacement. “This committee and the Senate should not approve any Trump nominee for the Fed,” she said.
The investigation is reportedly being overseen by the U.S. Attorney’s Office for the District of Columbia, according to the New York Times.
Trump has repeatedly criticised Powell for not lowering interest rates fast enough. Despite three rate cuts in the latter half of 2025, the president has continued to blame former President Joe Biden and interest rate policies for inflation. Critics warn that political pressure on the Fed could compromise its authority to set rates independently.
April Larusse, head of investment specialists at Insight Investment, told the BBC, “It isn’t accurate to say the Fed has done nothing on interest rates, so this pressure appears unjustified.”
The announcement of the investigation, alongside ongoing unrest in Iran, contributed to a surge in precious metal prices. Gold rose 1.4% to $4,572.36 per ounce on Monday, reaching a record high of $4,600.33 earlier, while silver hit a record of $84.58 before closing at $83.26, a 5.4% daily increase.
