U.S. federal prosecutors in Washington have initiated a criminal investigation into Federal Reserve Chair Jerome H. Powell, examining the central bank’s $2.5 billion renovation of its Washington headquarters and probing allegations that Powell misled Congress about the project’s scale, according to The New York Times’ report, citing people familiar with the matter.
The probe, which scrutinizes Powell’s public testimony and reviews financial records, received approval in November from U.S. Attorney Jeanine Pirro. Pirro, a longtime confidante of President Donald Trump who was tapped to lead the office last year, authorized the inquiry, officials said.
The investigation marks an escalation in President Trump’s ongoing dispute with Powell. Trump has consistently criticized the Fed chair for resisting demands to slash benchmark interest rates, despite having nominated Powell for the top post in 2017. The president has openly threatened Powell with dismissal and suggested possible legal action related to the costly headquarters overhaul, blaming Powell for “incompetence.”
On Sunday, Powell confirmed the Department of Justice had issued grand jury subpoenas to the Fed days earlier and described the criminal investigation as “unprecedented.” He questioned its underlying motives and reiterated his commitment to leading the central bank “without political fear or favor.”
Powell further warned that the case represents a direct challenge to the Fed’s long-standing independence. He remarked that the investigation was a consequence of the Fed’s reluctance to cut the rates.
U.S. law gives the Federal Reserve authority to set interest rates independent of presidential interference, requiring the institution to focus on maintaining stable inflation and robust employment.
President Trump, addressing recent developments, insisted the subpoenas were unrelated to rate-setting decisions. Meanwhile, the legitimacy of the investigation has been called into question by lawmakers from both parties.
