Federal Reserve Chair Jerome Powell revealed that the U.S. Department of Justice served the Federal Reserve with grand jury subpoenas and threatened a criminal indictment related to his testimony before the Senate Banking Committee last June. Powell said the subpoenas focus on his remarks about a $2.5 billion renovation of Federal Reserve office buildings — a project President Donald Trump has sharply criticized.
Powell Says Action Is Politically Motivated
In a video statement, Powell called the legal threat “pretexts” designed to weaken the Fed’s independence over interest rate decisions, framing the move as part of ongoing political pressure rather than a legitimate inquiry. He stressed the importance of the central bank’s ability to set policy based on economic conditions.
Market and Political Reactions
The unprecedented escalation has already unsettled financial markets, with U.S. stock futures and the dollar sliding as traders reacted to the news. Critics, including Republican lawmakers, warned that such actions could undermine trust in both the Federal Reserve and the Justice Department.
Broader Context of Trump Conflict With the Fed
The clash highlights deeper tensions between Powell and the Trump administration, which has repeatedly pressed for sharper interest rate cuts. Trump has publicly criticized Powell’s leadership and sought changes at the Fed, including moves against other Fed officials. Powell’s current term as chair expires in May 2026.
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