DOJ Opens Criminal Probe Into Jerome Powell

Federal Reserve chief Jerome Powell says the Justice Department has opened a criminal investigation into him, and he's framing it as a direct threat to the central bank's independence, the Washington Post reports. The probe centers on the Fed's costly renovation of its Washington headquarters and Powell's June testimony to the Senate about efforts to scale back parts of that project, according to a statement from the Fed. A Justice Department official, speaking anonymously, confirmed the inquiry into the Fed. President Trump told NBC News he had no knowledge of the probe, but said Powell is "certainly not very good at the Fed, and he's not very good at building buildings."

Powell said the Justice Department has issued grand jury subpoenas and is demanding information about what he told lawmakers—but he described those issues as mere "pretexts" for pressuring the central bank on interest rates. "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," Powell said in a video posted to the Fed's website. CNN calls the DOJ's action against Powell "stunning," and Powell's video response "extraordinary." Multiple lawmakers spoke out on the DOJ's move, with some calling for the Senate to refuse to move forward with any of Trump's Fed nominees until the matter is resolved.

Trump has repeatedly attacked Powell over the past year for not cutting rates more aggressively to bolster the economy, even floating the idea of firing him and suggesting the president should play a role in interest rate decisions. The Fed, facing a cooling job market and persistent inflation, has been cautious in adjusting rates. A DOJ spokesperson declined to address the specific investigation but said Attorney General Pam Bondi has instructed US attorneys to focus on possible misuse of taxpayer money. The clash sets up a rare confrontation between the nation's central bank and federal prosecutors, with Powell casting the criminal inquiry as an "unprecedented" attempt to influence monetary policy.