Federal Reserve Chair Jerome Powell criticized the Trump administration for undermining the central bank’s independence, stating that a criminal investigation stems from the Fed’s refusal to cut interest rates earlier this year as President Donald Trump had demanded.
He said in a that the Justice Department served the Fed with grand jury subpoenas, threatening a criminal indictment over his testimony before the Senate last June regarding headquarters renovations, which have experienced cost overruns.
Powell, who usually exercises caution in public comments, made it clear the probe was politically driven and unrelated to the Fed’s renovations or his testimony—labeling those issues as “pretexts.”
“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,” he wrote.
“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation.”
Powell added that he has served under both Republican and Democratic presidents “without political fear or favor,” focusing on the Fed’s dual mandate of price stability and maximum employment.
“Public service sometimes requires standing firm in the face of threats,” he said. “I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people.”
The statement came as that the U.S. Attorney’s Office in the District of Columbia has opened a criminal investigation into Powell and whether he lied to the Senate Banking Committee about the scope of the renovation project, which had .
Sources told the Times that Jeanine Pirro—a longtime Trump ally who leads the D.C. federal prosecutors—signed off on the probe.
The subpoena marks Trump’s latest attack on Powell and the Fed, which he harangued for months over its failure to lower interest rates sooner. Even when the Fed began easing rates in September, Trump said it should cut them more deeply.
In addition to verbal attacks, Trump considered firing Powell and threatened to sue him over renovation costs. Trump is also still attempting to remove Governor Lisa Cook after announcing her dismissal last year over alleged mortgage fraud. She has denied the accusation and challenged her firing, with the case now before the Supreme Court.
Meanwhile, Powell’s term as Fed chair expires in May, and Trump has said he already has someone in mind to replace him. Top candidates include Governor Christopher Waller, National Economic Council Director Kevin Hassett, and former Governor Kevin Warsh.
Powell could continue serving as a Fed governor until 2028, though previous Fed chairs typically left the board early when their term as chair ended.
Observers expected Powell to follow that tradition, especially after the Fed reappointed regional presidents—easing fears that Trump would purge them to stack the Federal Open Market Committee with loyalists.
But Powell’s forceful statement against the Justice Department probe makes that outcome less likely.