US Federal Reserve Board Chairman Jerome Powell speaks during a news conference following a Federal Open Market Committee (FOMC) meeting in Washington, DC, on Dec. 10, 2025.
- Federal Reserve Chair Jerome Powell is under federal criminal investigation related to the $2.5 billion renovation of the central bank’s headquarters and his congressional testimony about that, Powell said.
- Powell said the probe was the result of the Fed “setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of” President Donald Trump.
- Sen. Thom Tillis, a North Carolina Republican, and Banking Committee member, said he would oppose any nominee by Trump to replace Powell, and any Fed board nominee, “until this legal matter is fully resolved.”
Federal prosecutors are conducting a criminal investigation of Federal ReserveChair Jerome Powell focused on the $2.5 billion renovation of the central bank’s headquarters in Washington, D.C., and his related testimony to Congress, he said on Sunday evening.
Powell said the probe is the result of long-standing frustration by President Donald Trump over the Fed’s refusal to cut interest rates as quickly and as much as the president has demanded.
“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,” Powell said in a video statement tweeted by the Fed’s X account.
Powell warned that the outcome of the investigation will determine the future of the central bank’s decisions.
“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.
Stock futures fell on the heels of Powell’s statement.
Powell said the Department of Justice on Friday served the Fed “with grand jury subpoenas threatening a criminal indictment related to my testimony before the Senate Banking Committee last June.”
“That testimony concerned, in part, a multiyear project to renovate historic Federal Reserve office buildings,” he said.
The threat of indictment, Powell said, “is not about my testimony last June or about the renovation of the Federal Reserve buildings.”
“It is not about Congress’ oversight role; the Fed, through testimony and other public disclosures, made every effort to keep Congress informed about the renovation project,” he said. “Those are pretexts.”
“I have deep respect for the rule of law and for accountability in our democracy,” Powell said in his statement.
“No one, certainly not the chair of the Federal Reserve, is above the law, but this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.”
“I have served at the Federal Reserve under four administrations, Republicans and Democrats alike,” Powell said.
“In every case, I have carried out my duties without political fear or favor, focused solely on our mandate of price stability and maximum employment,” he said. “Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people.”
A DOJ spokesperson, in a statement to CNBC, without saying the comment was about Powell, said, “The Attorney General has instructed her US Attorneys to prioritize investigating any abuse of taxpayer dollars.”
A mess
Treasury Secretary Scott Bessent told President Trump late Sunday that the federal investigation into the Federal Reserve chair “made a mess” and could be bad for financial markets, two sources familiar with the call told Axios.
Bessent’s worries about the financial fallout were somewhat realized Monday, when the dollar dropped as bond yields and the price of gold rose amid worries about political interference in the Fed.
CNBC
