Federal prosecutors have launched a criminal investigation into Federal Reserve Chair Jerome Powell, according to a public statement made by Powell on Sunday.
Powell said the US Justice Department issued subpoenas linked to testimony he delivered before a Senate committee about renovation work at Federal Reserve buildings. He added that prosecutors warned a potential criminal indictment could follow.
The Fed chair called the investigation “unprecedented” and suggested that political pressure prompted it because he refused to cut interest rates despite repeated demands from President Donald Trump. Powell said the issue goes beyond his own position, calling it a test of whether interest-rate decisions will continue to be based on economic data rather than political pressure. He added that accountability applies to everyone, including the head of the Federal Reserve. But this action must be viewed in the broader context of sustained political pressure.”
So far, neither the Justice Department nor the White House has issued any official statement confirming the investigation.
Trump Denies Involvement
Speaking in an interview on Sunday, President Trump said he was unaware of any investigation into Powell. “I don’t know anything about it,” Trump said, while again criticizing Powell’s leadership at the Fed and the cost of the building renovations.
The Federal Reserve is currently renovating its Eccles and Constitution Avenue headquarters for the first time since the 1930s. The project includes major safety upgrades, such as asbestos and lead removal, along with structural modernization.
The Fed has said the overhaul will lower long-term operating expenses. However, Trump has argued the price tag has surged to about $3.1 billion, well above the Fed’s estimate of $2.5 billion.
Rising Tensions Over Fed Independence
The investigation deepens a long-running conflict between Trump and Powell, whom Trump originally appointed as Fed chair in 2017. Trump is expected to name Powell’s successor by the end of the month.
The president has repeatedly criticized Powell for not cutting interest rates fast enough, despite three rate reductions in the second half of 2025. Trump has often blamed elevated interest rates and decisions made by the previous administration for keeping prices high and household expenses under pressure.
Critics also warn that trying to influence the Federal Reserve could weaken its independence, something they believe is essential for keeping confidence in the US economic system. Republican Senator Thom Tillis, a member of the Senate Banking Committee, said he will oppose any Fed nomination from Trump until officials resolve the legal issues surrounding Powell.
Tillis added, “If anyone still had doubts about attempts to weaken the Federal Reserve’s independence, there should be none now.” “The integrity of the Justice Department is now facing serious scrutiny.”
Democratic Senator Elizabeth Warren accused Trump of attempting to remove Powell in order to replace him with a loyalist. She urged the Senate to block any new Fed nominations from the president.
Market Reaction and Economic Impact
News of the investigation, combined with continued unrest in Iran, pushed investors toward safe-haven assets. Gold rose 1.4% to $4,572.36 an ounce after touching a record high earlier in the session. Silver also climbed sharply, briefly reaching a new record before easing slightly.
Investment analysts said the case risks adding further uncertainty to already sensitive global markets.
Broader Legal Context
The reported investigation will be handled by the US Attorney’s Office for the District of Columbia. The case was first reported by the New York Times.
Trump has previously targeted other senior officials, including Federal Reserve Governor Lisa Cook, whom he attempted to dismiss over alleged mortgage issues. A federal court blocked the case, and the Supreme Court will now review it.
Trump’s Justice Department filed several high-profile prosecutions against political rivals, but courts later dismissed them, with the defendants insisting that the cases were politically motivated.
Outlook
As Powell’s term nears its end and officials prepare to name his successor, the investigation is putting the future leadership of the Federal Reserve under intense political and legal scrutiny.
Analysts say that even the impression of political involvement in the Fed’s decisions could shake investor confidence and erode the central bank’s long-standing reputation for independence.
