Justice Department Opens Criminal Inquiry into Fed Chair Jerome Powell

The Justice Department opened a criminal investigation into Jerome H. Powell, the chair of the Federal Reserve, a move The New York Times said escalates pressure on the central bank to cut interest rates. Mr. Powell is the first Federal Reserve chair to face a criminal investigation.

The department served grand jury subpoenas late on Friday related to renovations at the Fed’s Washington headquarters, a project under way since 2022 that is $700 million over budget and expected to cost roughly $2.5 billion and to be completed in 2027. Mr. Powell and Fed staff worked through the weekend and he released a two‑minute video on Sunday saying, "This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings," and that "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." The Times reported that the Fed has cut interest rates only gradually, reducing them by 0.75 percentage points since September to a new range of 3.5 percent to 3.75 percent.

It said President Trump has demanded rates as low as 1 percent and has called Mr. Powell a "numbskull" and a "stubborn mule." Legal experts quoted in the article said the president's focus on the renovations could be groundwork to try to remove a chair "for cause." Mr. Powell had retained outside counsel, Williams & Connolly.

Mr.

Key Topics

Politics, Jerome Powell, Federal Reserve, Justice Department, Fed Headquarters, Grand Jury Subpoenas