{"id":402330,"date":"2026-01-12T04:39:09","date_gmt":"2026-01-12T04:39:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/402330\/"},"modified":"2026-01-12T04:39:09","modified_gmt":"2026-01-12T04:39:09","slug":"federal-reserve-chair-powell-says-doj-has-subpoenaed-central-bank-threatens-criminal-indictment","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/402330\/","title":{"rendered":"Federal Reserve Chair Powell says DOJ has subpoenaed central bank, threatens criminal indictment"},"content":{"rendered":"

WASHINGTON (AP) \u2014 Federal Reserve Chair Jerome Powell<\/a>said Sunday<\/a> the Department of Justice has served the central bank with subpoenas and threatened it with a criminal indictment over his testimony this summer about the Fed’s building renovations.<\/p>\n

The move represents an unprecedented escalation in President Donald Trump’s battle with the Fed, an independent agency he has repeatedly attacked for not cutting its key interest rate as sharply as he prefers. The renewed fight will likely rattle financial markets Monday and could over time escalate borrowing costs for mortgages and other loans.<\/p>\n

The subpoenas relate to Powell’s testimony before the Senate Banking Committee in June, the Fed chair said, regarding the Fed’s $2.5 billion renovation of two office buildings, a project that Trump has criticized as excessive<\/a>.<\/p>\n

Powell on Sunday cast off what has up to this point been a restrained approach to Trump’s criticisms and personal insults, which he has mostly ignored. Instead, Powell issued a video statement<\/a> in which he bluntly characterized the threat of criminal charges as simple \u201cpretexts\u201d to undermine the Fed\u2019s independence<\/a> when it comes to setting interest rates.<\/p>\n

\u201cThe 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,” Powell said. \u201cThis is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions \u2014 or whether instead monetary policy will be directed by political pressure or intimidation.\u201d<\/p>\n

It’s a sharp departure from the Fed’s understated response to Trump this year. The central bank has attempted to placate the administration by dialing back some policies, such as efforts to consider the impact of climate change on the banking system, that the administration clearly opposed.<\/p>\n

The renewed attacks on the Fed\u2019s independence, and Powell\u2019s full-throated defense, reignite what had appeared to be a dormant battle between Trump and the chair he appointed in 2017. The subpoenas will renew fears that the Fed’s independence from day-to-day politics will be compromised, which could undermine global investors’ confidence in U.S. Treasury securities.<\/p>\n

\u201cWe expect the dollar, bonds and stocks to all fall in Monday trading in a sell-America trade similar to that in April last year at the peak of the tariff shock and earlier threat to Powell\u2019s position as Fed chair,\u201d Krishna Guha, an analyst at Evercore ISI, an investment bank, wrote in a note to clients.<\/p>\n

\u201cWe are stunned by this deeply disturbing development which came out of the blue after a period in which tensions between Trump and the Fed seemed to be contained,\u201d Guha added.<\/p>\n

In a brief interview with NBC News Sunday, Trump insisted he didn\u2019t know about the investigation into Powell. When asked if the investigation is intended to pressure Powell on rates, Trump said, \u201cNo. I wouldn\u2019t even think of doing it that way.\u201d<\/p>\n

Powell’s term as chair ends in May, and Trump administration officials have signaled that he could name a potential replacement this month. Trump has also sought to fire Fed governor Lisa Cook, an unprecedented step, though she has sued to keep her job and courts have ruled she can<\/a> remain in her seat while the case plays out. The Supreme Court will hear arguments in that case Jan. 21.<\/p>\n

At the Senate Banking Committee hearing in June, Chairman Tim Scott, a Republican from South Carolina, said the Fed’s building renovation included \u201crooftop terraces, custom elevators that open into VIP dining rooms, white marble<\/a> finishes, and even a private art collection.\u201d<\/p>\n

Powell disputed those details in his testimony, saying \u201cthere\u2019s no new marble. … there are no special elevators” and added that some of the controversial items are \u201cnot in the current plan.\u201d In July, Russell Vought, director of the Office of Management and Budget, said in a letter to Powell<\/a> that his testimony about changes to the building plans \u201craises serious questions about the project’s compliance\u201d with previous plans approved by a planning commission.<\/p>\n

Still, later that month, Trump visited the building<\/a> site and, while standing next to Powell, overstated the cost<\/a> of the renovation. Later that day, Trump, speaking to reporters, downplayed any concerns with the renovation. He said, \u201cthey have to get it done\u201d and added, \u201cLook, there\u2019s always Monday morning quarterbacks. I don\u2019t want to be that. I want to help them get it finished.\u201d<\/p>\n

When asked if it was a firing offense, Trump said, \u201cI don\u2019t want to put that in this category.\u201d<\/p>\n

The Justice Department in a statement Sunday said it can\u2019t comment on any particular case, but added that Attorney General Pam Bondi \u201chas instructed her US Attorneys to prioritize investigating any abuse of tax payer dollars.\u201d<\/p>\n

Timothy Lauer, a spokesperson for U.S. Attorney Jeanine Pirro\u2019s office, said they don\u2019t comment on ongoing investigations.<\/p>\n

With the subpoenas, Powell becomes the latest perceived adversary of the president to face a criminal investigation by the Trump administration’s Justice Department. Trump himself has urged prosecutions of his political opponents, obliterating institutional guardrails for a Justice Department that for generations has taken care to make investigative and prosecutorial decisions independent of the White House.<\/p>\n

The potential indictment has already drawn concern from one Republican senator, who said he\u2019ll oppose any future nominee to the central bank, including any replacement for Powell, until \u201cthis legal matter is fully resolved.\u201d<\/p>\n

\u201cIf there were any remaining doubt whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none,\u201d said North Carolina Sen. Thom Tillis, who sits on the Banking Committee, which oversees Fed nominations. \u201cIt is now the independence and credibility of the Department of Justice that are in question.\u201d<\/p>\n

___<\/p>\n

Associated Press writers Seung Min Kim, Eric Tucker, Michael Kunzelman, and Alanna Durkin Richer contributed to this report.<\/p>\n","protected":false},"excerpt":{"rendered":"WASHINGTON (AP) \u2014 Federal Reserve Chair Jerome Powellsaid Sunday the Department of Justice has served the central bank…\n","protected":false},"author":2,"featured_media":402331,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[23,194138,17985,2800,28615,9569,2938,3,942,167080,66612,21,19,22,20,25,24],"class_list":["post-402330","post","type-post","status-publish","format-standard","has-post-thumbnail","category-united-states","tag-america","tag-criminal-indictment","tag-department-of-justice","tag-federal-reserve","tag-independence","tag-interest-rate","tag-jerome-powell","tag-news","tag-president-donald-trump","tag-senate-banking-committee","tag-the-central-bank","tag-united-states","tag-united-states-of-america","tag-unitedstates","tag-unitedstatesofamerica","tag-us","tag-usa"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/402330","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=402330"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/402330\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/402331"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=402330"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=402330"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=402330"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}