US President Donald Trump speaks with Federal Reserve chair Jerome Powell (R) as he visits the Federal Reserve in Washington, DC, on July 24, 2025. (Photo by ANDREW CABALLERO-REYNOLDS/AFP via Getty Images)
The Department of Justice has launched a criminal investigation in Federal Reserve Chair Jerome Powell, a staggering escalation of President Donald Trump's almost year-long campaign to strong-arm the central bank into dramatically lowering interest rates.
Powell released a video statement on Sunday evening confirming the investigation. He said the DOJ had served the Federal Reserve with grand jury subpoenas on Friday related to testimony that Powell delivered to the Senate Banking Committee in June, regarding ongoing renovations of the Fed's aging headquarters in Washington.
Until now, Powell has labored to avoid a direct confrontation with the White House in its scorched-earth effort to pressure the Fed into cutting borrowing costs. He was blunt on Sunday in assessing what was behind the subpoena.
"Those are pretexts," Powell said. "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."
"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," he said.
Powell added that he had served in Republican and Democratic administrations alike. He made clear that he wasn't going to allow the Trump administration to remove him from his post. "I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people," he said.
Spokespeople for the DOJ did not immediately respond to a request for comment.
Powell has long defended the Fed's handling of the renovation. Trump and other White House officials seized on cost overruns to build a case to oust Powell. The president visited the site last July in what quickly turned into a televised spectacle. At one point, Powell corrected Trump on the price tag of the project.
The four-year renovation of two century-old buildings within the Fed's headquarters swelled past its original $1.9 billion cost to $2.5 billion due to a variety of factors, including the unexpected drainage of groundwater from the construction site and the necessity of complying with federal guidelines governing historic building upgrades.
