U.S. prosecutors have served the Federal Reserve with grand jury subpoenas, Fed chairman Jerome Powell said in a video statement on Sunday night.
The Fed received the subpoenas from the Justice Department on Friday, Powell said. He said federal prosecutors are threatening a criminal indictment relating to Powell’s testimony before the Senate Banking Committee last June. That testimony concerned in part the Fed’s renovation of the central bank’s offices in Washington, D.C.
Powell claimed, without evidence, that the inquiries into the renovations and his congressional testimony were merely “pretexts” for political interference in monetary policy. The threat of criminal charges, Powell claimed, was the result of the Fed refusing to follow the “preferences of the president” when setting interest rates.
“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.
Powell’s video statement was posted to the Fed’s official account on X.com.
A government official with knowledge of the matter confirmed that prosecutors are looking into the Fed.
In July, President Trump toured the construction site at the Fed headquarters alongside Powell. The president has been critical of the cost of the renovations, which are now estimated at $2.5 billion.
In August, Trump said he was considering a “major lawsuit” against Powell and the Fed over 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.
Trump was sharply critical of Powell during his first term as president, arguing that the Fed was unnecessarily raising rates at the time. Since returning to the White House, Trump has kept up pressure on the Fed to cut interest rates and has been sharply critical of Powell. Trump has attempted to remove Fed governor Lisa Cook over allegations of mortgage fraud but that move was blocked by a federal judge. Oral arguments in that case are scheduled to be heard by the Supreme Court in January.
Powell was nominated by President Trump to lead the Fed in 2017. Powell was reappointed by President Joe Biden in 2021. His term as chairman ends in May but term as a governor of the Fed does not expire until January 2028. While it is traditional for outgoing chairmen to also surrender their governor seat, Powell has refused to say he will depart in May.
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