Federal Reserve Chair Jerome Powell Faces Criminal Investigation

Mon Jan 12 2026 19:08:49 GMT+0200 (Eastern European Standard Time)

The U.S. Justice Department has launched a criminal probe into Federal Reserve Chairman Jerome Powell, raising concerns over political interference in economic policy amid escalating tensions with former President Trump.

Federal prosecutors are investigating Federal Reserve Chairman Jerome Powell following his testimony regarding renovations at Fed buildings. Powell believes this unprecedented action stems from political pressure due to his resistance to Trump’s calls for lower interest rates. The investigation, overseen by the U.S. Attorney's Office for the District of Columbia, highlights the ongoing conflict between Trump and Powell and raises questions about the independence of the Federal Reserve in setting monetary policies free from political influence.

Federal prosecutors have opened a criminal investigation into Federal Reserve Chairman Jerome Powell, he said on Sunday. In a video announcing the probe, Powell stated that the U.S. Justice Department served the agency with subpoenas and threatened a criminal indictment over his testimony to a Senate committee regarding renovations to Federal Reserve buildings.

Powell called the investigation unprecedented and suggested it was initiated due to his refusal to lower interest rates amid public pressure from former President Donald Trump. This makes him the latest official to face legal scrutiny following a conflict with Trump.

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 asserted during the announcement.

Trump, in an interview with NBC News on Sunday, claimed ignorance about the investigation but criticized Powell's effectiveness at the Fed. He has consistently pressured the central bank to cut interest rates, causing tension since Powell was nominated for the role in 2017.

The probe, which prosecutors have not confirmed, could escalate Trump’s already contentious relationship with Powell, with concerns raised about the independence of the Federal Reserve, an institution critical to U.S. economic policy.

Senator Thom Tillis, a Republican from North Carolina, expressed his opposition to any Fed nominations from Trump until this legal matter is resolved, while Democrats, including Senator Elizabeth Warren, have accused Trump of attempting to manipulate the Federal Reserve for his benefit.

As news of the investigation broke, markets reacted, with precious metals like gold and silver recording significant price increases amid investor uncertainty.