Powell rebukes White House after DOJ subpoenas, raising stakes for Fed independence

Jerome H. Powell pushed back publicly after The New York Times revealed a criminal investigation into whether he lied to Congress, and after the Justice Department served the Federal Reserve with grand jury subpoenas, prompting the central bank to abandon its previous cautious stance toward the administration.

The subpoenas, served late on Friday, relate to renovations at the Fed’s Washington headquarters that have been under way since 2022; the project is roughly $700 million over budget, expected to cost about $2.5 billion and is set to be completed in 2027. In a rare video message, Mr.

Powell said the threat of criminal charges stemmed from the Fed setting interest rates based on its own assessment rather than following the president’s preferences. The Fed has cut rates only gradually, reducing them by 0.75 percentage points since September to a range of 3.5 percent to 3.75 percent; President Trump has demanded rates as low as 1 percent and has repeatedly criticized Mr.

Powell. Mr. Powell has retained outside counsel, hiring Williams & Connolly, and his response drew support from every living former Fed chair and multiple former Treasury secretaries, who described the moves as “prosecutorial attacks to undermine that independence.” Janet L.

Key Topics

Politics, Jerome Powell, Federal Reserve, Justice Department, Donald Trump, Williams & Connolly