The U.S. Federal Reserve confirmed late on Sunday that federal prosecutors are investigating Chair Jerome Powell regarding testimony about a multi-billion-dollar headquarters renovation project. The probe centers on Powell’s June 2025 statements to the Senate Banking Committee, with the Department of Justice issuing grand jury subpoenas threatening criminal charges.
In a public statement, Powell framed the investigation as part of “broad political pressure” to influence monetary policy decisions. “This is about whether the Fed will continue setting interest rates based on evidence rather than political intimidation,” he asserted, referencing ongoing tensions with the White House. U.S. President Donald Trump, who took office in January 2025, has repeatedly criticized Powell for resisting aggressive rate cuts.
The U.S. Attorney’s Office for the District of Columbia is overseeing the case, which has raised concerns about central bank independence. Powell’s current term as chair runs through May 2026, following his 2018 appointment by Trump and 2022 reappointment by former President Joe Biden.
Analysts suggest the investigation could destabilize financial markets already navigating global economic headwinds. The Fed’s renovation project, involving historic office buildings in Washington D.C., has drawn scrutiny over budget allocations since its 2024 approval.
