DOJ Opens Criminal Investigation Into Fed Chair Powell

Federal Reserve Chair Jerome Powell said the U.S. central bank was served with grand jury subpoenas by the Department of Justice on Jan. 9.

In a statement late Jan. 11, Powell confirmed that officials threatened a criminal indictment over his Senate Banking Committee testimony in June 2025. That testimony, Powell noted, “concerned in part a multi-year project to renovate historic Federal Reserve office buildings.”

The central bank chief dismissed the idea that this criminal probe was driven by his testimony or the renovation.

“I have deep respect for the rule of law and for accountability in our democracy. No one—certainly not the chair of the Federal Reserve—is above the law,” Powell said. “But this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.”

“Those are pretexts,” he continued. “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.”

His remarks came hours after reports surfaced that federal prosecutors opened an inquiry into Powell.

Last summer, the Fed was under fire over renovations of its headquarters in Washington. The president and administration officials lambasted the institution for overspending on the Marriner S. Eccles Building on the National Mall and 1951 Constitution Avenue.

Trump, alongside Powell, toured the construction site in July 2025. The two men disagreed on the cost-overrun estimates.

When the renovation project was approved in 2017, the budget was $1.9 billion. It has since increased to $2.5 billion because of inflation, asbestos and soil contamination, and extended timelines. Trump noted that the price tag rose by an additional $600 million.

“I’m not aware of that, Mr. President. I haven’t heard that from anybody at the Fed,” Powell told Trump in front of reporters.

In addition to the renovations, Trump has long complained that Powell and his colleagues have not lowered interest rates more aggressively, like other central banks in advanced economies.

While the Fed has reduced rates by 75 basis points since September, Trump told The Wall Street Journal in December 2025 that the benchmark federal funds rate—a key policy rate that influences business and household borrowing costs—should be “1 percent and maybe lower than that.”

Powell’s term expires in May.

A search for his successor is still underway, with Treasury Secretary Scott Bessent telling the Economic Club of Minnesota earlier this week that the president will make his decision sometime this month.

Predictive markets suggest that former Fed Gov. Kevin Warsh is now the favorite at 44 percent odds, surpassing National Economic Council Director Kevin Hassett.

The Supreme Court will also hear oral arguments on Jan. 21 in the case of Fed Governor Lisa Cook and whether the president maintains the power to terminate a member of the Board of Governors for any reason.

This past summer, Trump attempted to fire Cook over allegations of mortgage fraud. The high court temporarily blocked the president from firing her, allowing Cook to stay in her position.

U.S. stocks turned negative in futures trading following the announcement, with the leading benchmark indexes down across the board.

The U.S. Dollar Index fell more than 0.2 percent, while yields on Treasury securities were mixed.