On January 9, Washington D.C.’s U.S. attorney’s office served grand jury subpoenas against Federal Reserve Chair Jerome H. Powell. A criminal investigation relating to Powell’s June 2025 testimony to the Senate Banking Committee about the Federal Reserve’s renovation project has commenced.
Trump has repeatedly criticized Powell, and has flirted with the idea of removing him, despite the facts that the Federal Reserve is an independent body, and that Trump himself nominated Powell in 2017; Trump boasted that he would only hire “the best people.” This criticism stems from Powell refusing to artificially lower interest rates.
Indeed, in an extraordinary statement about the investigation, given on January 11, Powell remarked:
This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress’s oversight role; the Fed through testimony and other public disclosures made every effort to keep Congress informed about the renovation project. Those are pretexts. 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.
Board of Governors of the Federal Reserve System
The Federal Reserve has remained transparent about the renovation, which was needed to remove asbestos and lead contamination from its Washington D.C. headquarters. The building also needed to be updated to comply with disability access laws. It admitted that it ran $700 million over budget as a result of “unforeseen circumstances” such as soil contamination. As a reminder, this criminal investigation relates to whether or not Powell committed perjury in the Senate, something only claimed by Trump and his supporters, not whether or not the renovation project ran over budget.
Trump stated on January 8 that he has already decided on Powell’s successor, who will become the new chairman in May. However, Powell will remain as a governor of the Federal Reserve until January 2028.
Consistent with several other actions in Trump’s second term, this investigation undermines the independence of the Federal Reserve. Federal Housing Finance Agency director Bill Pulte has been at the forefront of the White House’s attempt to dominate the Federal Reserve. He, without evidence, claimed that Federal Reserve governor Lisa Cook committed mortgage fraud. This allegation encouraged Trump to, likely illegally, fire Cook. Pulte has accused Powell, also without evidence, of “political bias” and perjury. He has also joined Trump in calling for lower interest rates.
