Powell links DOJ subpoenas to interest-rate dispute, calls action "unprecedented"

Beincrypto reports Federal Reserve Chair Jerome Powell said the Department of Justice issued grand jury subpoenas to the Fed and threatened a criminal indictment tied to his Senate testimony about the $2.5 billion renovation of the central bank's Washington headquarters. Powell described the move as "unprecedented" and said it should be seen within a broader context of sustained pressure from the administration.

He argued that claims about the renovation are being used as a pretext and linked the Justice Department probe to policy disputes: "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 Fed cut its benchmark interest rate three times in the second half of 2025, most recently in December to a range of 3.50% to 3.75%, and ended quantitative tightening on December 1, 2025.

Powell's term expires in May 2026, and Fox News reported President Donald Trump has narrowed a shortlist to four candidates—Kevin Hassett, Kevin Warsh, Christopher Waller and Rick Rieder—with one interview remaining before a final decision. Trump, in an NBC interview, denied knowing about any Justice Department investigation and said the subpoenas had nothing to do with interest-rate policy: "I don't know anything about it, but he's certainly not very good at the Fed, and he's not very good at building buildings," and "No.

Key Topics

Politics, Jerome Powell, Federal Reserve, Donald Trump, Fed Headquarters, Interest Rates