U.S. prosecutors have served the Federal Reserve with grand jury subpoenas, according to a video statement released Sunday night by Fed Chairman Jerome Powell. Powell said the subpoenas were delivered by the Justice Department on Friday and that federal prosecutors are threatening a criminal indictment tied to his testimony before the Senate Banking Committee last June. That testimony addressed, in part, the Federal Reserve’s ongoing renovation of its headquarters and related offices in Washington, D.C.
In his statement, Powell said the inquiries into both the renovation project and his congressional testimony were merely “pretexts” for political interference in the central bank’s independence. He said the threat of criminal charges stemmed from the Fed’s refusal to follow the “preferences of the president” when setting interest rates, framing the matter as a challenge to the institution’s long-standing role in conducting monetary policy without political direction. “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 said.
President Donald Trump denied any knowledge of the investigation in comments to NBC News. “I don’t know anything about it, but he’s certainly not very good at the Fed, and he’s not very good at building buildings,” Trump told NBC News Sunday night. Trump also said the investigation had nothing to do with his disagreements with Powell over monetary policy. “No. I wouldn’t even think of doing it that way. What should pressure him is the fact that rates are far too high. That’s the only pressure he’s got,” Trump told NBC.
Powell’s video statement was posted to the Federal Reserve’s official account on X.com. Separately, a government official with knowledge of the matter confirmed that prosecutors are examining the Federal Reserve, and The New York Times reported that the inquiry into Powell’s testimony and the renovation project was approved in November by Jeanine Pirro, the U.S. Attorney for the District of Columbia.
The renovation of the Fed’s headquarters has drawn increasing scrutiny over its cost and scope. In July, President Trump toured the construction site alongside Powell, and in subsequent months publicly criticized the project, which is now estimated to cost approximately $2.5 billion. In August, Trump said he was considering legal action related to the renovations. “Fortunately, the economy is sooo good that we’ve blown through Powell and the complacent Board. I am, though, considering allowing a major lawsuit against Powell to proceed because of the horrible, and grossly incompetent, job he has done in managing the construction of the Fed Buildings. Three Billion Dollars for a job that should have been a $50 Million Dollar fix up. Not good!” Trump posted on Truth Social.
The investigation comes against the backdrop of a long-running and public dispute between Trump and Powell over interest rates and the direction of monetary policy. During his first term, Trump frequently criticized the Fed for raising rates, arguing the moves were unnecessary. Since returning to the White House, he has continued pressing the central bank to lower rates. Trump has also sought to remove Fed Governor Lisa Cook over allegations of mortgage fraud, though a federal judge blocked that effort; oral arguments in that case are scheduled before the Supreme Court in January.
Powell was nominated to lead the Federal Reserve by President Trump in 2017 and was reappointed by President Joe Biden in 2021. His term as chairman ends in May, though his term as a Fed governor runs until January 2028. While it has been customary for departing chairmen to relinquish their governor seats, Powell has declined to say whether he will step down when his chairmanship concludes.
