Federal Reserve Chairman Jerome Powell confirmed Sunday that he is the subject of a newly launched Department of Justice investigation, marking the latest chapter in his public clash with President Donald Trump.
On Friday, the Justice Department served the Fed with grand jury subpoenas. Powell said the probe appears to focus on his congressional testimony last summer regarding renovations to the Federal Reserve’s headquarters in Washington, D.C. But in a recorded statement, he suggested the scope may be wider.
IN CASE YOU MISSED IT | Trump visits Federal Reserve amid criticism of Powell, renovation costs
“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president,” Powell said.
Video message from Federal Reserve Chair Jerome H. Powell: https://t.co/5dfrkByGyX pic.twitter.com/O4ecNaYaGH
— Federal Reserve (@federalreserve) January 12, 2026
Although Trump appointed Powell during his first term in office, the two have repeatedly sparred over interest rate policy during the president’s second term. Trump has criticized Powell for not cutting rates more aggressively, arguing that lower rates would make housing and household expenses more affordable.
On Monday, White House Press Secretary Karoline Leavitt said President Trump did not direct Department of Justice officials to open an investigation into Powell, though she said Trump has made it clear that Powell is “bad at this job,” but it will be up to the DOJ to determine whether he is a criminal.
RELATED STORY | What is the Federal Reserve's role in shaping US monetary policy?
News of the DOJ investigation, meanwhile, has raised concerns from both sides of the political aisle.
The gravity was underscored by a letter released Monday morning by a group of bipartisan former Fed chairs and other economic officials — including Ben Bernanke, Janet Yellen, and Alan Greenspan — in which they called the inquiry “an unprecedented attempt to use prosecutorial attacks” to undermine the Fed’s independence. The letter went on to warn such actions “have no place in the United States.”
The Fed’s independence has long held importance to create credibility both in the American public and global financial markets, who trust the Fed’s decisions are based on data, not politics — any perception otherwise risks creating economic volatility.
Republican Sen. Thom Tillis of North Carolina accused the White House of attempting to dismantle the Fed’s independence. He said he will oppose any new nominees to the central bank in response. Democratic Sen. Elizabeth Warren also reacted sharply, accusing Trump of seeking authoritarian control following the announcement of the investigation.
“As Donald Trump prepares to nominate a new Fed Chair, he wants to push Jerome Powell off the Fed Board for good and install another sock puppet to complete his corrupt takeover of America’s central bank," Warren said in a statement. "Trump is abusing the authorities of the Department of Justice like a wannabe dictator so the Fed serves his interests, along with his billionaire friends. This Committee and the Senate should not move forward with any Trump nominee for the Fed, including Fed Chair.”
Powell's term is slated to end in the coming months, but it remains unclear how the DOJ investigation will impact that timeline.
