âť“WHAT HAPPENED: Federal prosecutors have opened a criminal investigation into Federal Reserve Chairman Jerome Powell, who revealed that the Department of Justice (DOJ) served subpoenas over testimony he gave about renovations to Federal Reserve buildings.
👤WHO WAS INVOLVED: Jerome Powell, President Donald J. Trump, the DOJ, and members of the Senate Banking Committee.
đź“ŤWHEN & WHERE: Powell disclosed the investigation on Sunday, January 11, 2026; the probe is being overseen by the U.S. Attorney’s Office for the District of Columbia.
đź’¬KEY QUOTE: “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.” — President Trump
🎯IMPACT: The federal investigation raises concerning allegations of financial mismanagement at the central bank, while critics claim the probe represents a threat to the Federal Reserve’s “independence.”
Federal Reserve Chairman Jerome Powell revealed on Sunday that the Department of Justice (DOJ) has launched a criminal investigation into him, serving subpoenas over testimony he gave to a Senate committee regarding renovations to the central bank’s offices. Powell described the probe as “unprecedented” and suggested it stemmed from President Donald J. Trump‘s public campaign to pressure the Federal Reserve into lowering interest rates.
“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions, or whether instead monetary policy will be directed by political pressure or intimidation,” Powell said. He continued, “I have deep respect for the rule of law and for accountability in our democracy. No one, certainly not the chair of the Federal Reserve, is above the law, but this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.”
Trump has denied any knowledge of the investigation, stating later on Sunday, “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.” The Fed is currently modernizing two of its buildings, with renovations expected to cost $3.1 billion, exceeding initial projections of $2.5 billion. Trump has criticized the rising costs.
The investigation, overseen by the U.S. Attorney’s Office for the District of Columbia, has sparked bipartisan debate on Capitol Hill. Senator Thom Tillis (R-NC) announced opposition to any Fed nominations until the legal matter is resolved. Meanwhile, Senator Elizabeth Warren (D-MA) accused Trump of attempting to “install another sock puppet” to undermine the Fed’s “independence.”
The criminal probe comes as Powell prepares to step down in May, with Trump expected to name his successor soon. In December, the central bank enacted its third consecutive rate cut, although at the time, some economists suggested it could be the final cut for some time. However, job data released earlier this month suggests that the labor market continues to weaken, which will likely prompt the Federal Reserve to continue reducing rates.
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