The US Justice Department has opened a criminal investigation into Federal Reserve Chairman Jerome Powell, marking a dramatic escalation in tensions between the central bank and President Donald Trump.
Powell disclosed the probe on Sunday, saying federal prosecutors had served subpoenas to the Federal Reserve and raised the possibility of criminal charges linked to testimony he gave before a Senate committee regarding renovations to Fed buildings.
He described the investigation as “unprecedented” and suggested it was politically motivated, pointing to repeated clashes with Trump over monetary policy and his refusal to cut interest rates despite sustained public pressure from the White House.
“This is about whether the Federal Reserve will be able to continue setting interest rates based on evidence and economic conditions, or whether monetary policy will be directed by political pressure or intimidation,” Powell said.
The Fed chair stressed his respect for the rule of law but warned that the probe must be viewed in the context of what he described as sustained threats against the independence of the central bank.
Trump, said he was unaware of the Justice Department’s actions but renewed criticism of Powell’s leadership. “He’s certainly not very good at the Fed, and he’s not very good at building buildings,” the president said.
The Justice Department has not publicly confirmed the investigation. According to the New York Times, the probe is being overseen by the US Attorney’s Office for the District of Columbia.
The move comes amid Trump’s long-running feud with Powell, whom he appointed Fed chair in 2017 but has repeatedly accused of mishandling interest rate policy. While the Fed cut rates three times in the second half of 2025, Trump has argued the reductions were insufficient and has blamed interest rates for high consumer costs.
Critics warn that efforts to investigate or remove Powell risk undermining the Federal Reserve’s independence. Republican Senator Thom Tillis of North Carolina said he would oppose any Trump nominee to the Fed Board until the legal matter is resolved.
“If there were any remaining doubt that advisers within the Trump administration are pushing to end the independence of the Federal Reserve, there should now be none,” Tillis said.
Democratic Senator Elizabeth Warren accused Trump of attempting to force Powell out in order to install a loyalist. “This committee should not move forward with any Trump nominee for the Fed,” she said.
The probe follows other failed criminal cases brought during Trump’s presidency against political figures, including former FBI Director James Comey and New York Attorney General Letitia James, which courts dismissed as lacking merit.
Erizia Rubyjeana
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