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Federal Reserve Chair Jerome Powell has pushed back against the Trump administration after federal prosecutors served the central bank with grand jury subpoenas on Friday.
The subpoenas are part of a criminal investigation tied to his testimony before Congress in June regarding a multi-year project to renovate the historic Federal Reserve office buildings.
- Federal Reserve Chair Jerome Powell called the criminal probe into the Fed’s renovation project unprecedented and politically motivated.
- Powell linked subpoenas to Trump’s frustration over the Fed’s refusal to cut interest rates more aggressively.
- Trump denied involvement in the probe but continued to criticize Powell’s leadership and monetary policies.
In a rare video posted late on Sunday, Powell framed the investigation as unprecedented and politically motivated, warning that it risked undermining the central bank’s ability to make decisions free from White House pressure.
Jerome Powell framed the decision as politically motivated
Image credits: Chip Somodevilla/Getty Images
While stressing his respect for the legal process, he made clear that he believed the probe went far beyond questions about a renovation project at the Fed’s Washington headquarters.
“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,” Powell said.
“But this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.”
Powell rejected the idea that the criminal inquiry stemmed from his testimony or the Fed’s renovations, directly linking the subpoenas to the administration’s frustration with the Fed’s refusal to cut interest rates more aggressively.
President Donald Trump has repeatedly criticized Powell over monetary policy, arguing that interest rates remain too high and accusing the Fed of hindering economic growth.
Trump has also said he does not plan to renominate Powell when his term as chair expires in May.
Video message from Federal Reserve Chair Jerome H. Powell: https://t.co/5dfrkByGyXpic.twitter.com/O4ecNaYaGH
— Federal Reserve (@federalreserve) January 12, 2026
“This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress’ oversight role; the Fed through testimony and other public disclosures made every effort to keep Congress informed about the renovation project. Those are pretexts,” Powell said.
“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.
“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.”
Federal prosecutors are now examining statements Powell made during testimony to Congress in June about the $2.5 billion renovation of the Fed’s aging headquarters.
Image credits: Alex Wong/Getty Images
During that testimony, Powell told lawmakers the project’s scope and cost had changed as work progressed on the Fed’s buildings, citing safety requirements such as asbestos removal and upgrades to electrical, ventilation, and security systems.
He said the renovation followed standard approval processes and that Congress and other oversight bodies were kept informed as plans evolved.
The project has drawn criticism from Trump and his allies, with the president even making a rare visit to the headquarters in July after suggesting funds for the renovation had been mismanaged.
The White House has denied any involvement in the Justice Department’s new subpoenas.
In a phone call with NBC News, Trump said he was unaware of the probe and again attacked Powell personally.
Trump has repeatedly targeted Powell
Image credits: Chip Somodevilla/Getty Images
“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,” Trump said.
Asked to respond to Powell’s assertion that the subpoenas were intended to pressure the Fed to lower rates, Trump dismissed the claim. “No. I wouldn’t even think of doing it that way,” he said.
But he added that Powell should feel pressure of another kind. “What should pressure him is the fact that rates are far too high. That’s the only pressure he’s got.”
Trump’s remarks reflect a broader campaign he has waged against the Fed chair over the past year, with the president threatening to sue Powell over the renovations and even fire him, while also lobbing insults at Powell on his Truth Social account.
Image credits: Alex Wong/Getty Images
While the central bank cut interest rates three times in the second half of last year, officials have recently signaled they are unlikely to reduce borrowing costs further in the near term.
That stance has angered the president, who has argued publicly that he should have greater influence over rate decisions, despite the Fed being an independent entity.
The conflict has also extended beyond Powell himself.
In August, Trump fired Fed Governor Lisa Cook, who had been appointed by former President Joe Biden, citing allegations of mortgage fraud.
Image credits: Drew Angerer/Getty Images
Cook has not been charged with a crime, and the Supreme Court is set to hear arguments later this month on whether the president had the authority to remove her.
The case has heightened concerns among economists and investors that the administration is testing the legal limits protecting the Fed’s independence.
In his video statement on Sunday, Powell addressed those concerns indirectly, emphasizing his history at the bank and how he was able to carry out his duties without fear or retribution.
“I have served at the Federal Reserve under four administrations, Republicans and Democrats alike,” he said. “In every case, I have carried out my duties without political fear or favor, focused solely on our mandate of price stability and maximum employment.
“Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people.”
Republicans and Democrats have condemned the investigation
Image credits: Tom Williams/CQ-Roll Call, Inc via Getty Images
Justice Department officials have declined to comment on the specifics of the probe, saying only that the attorney general is prioritizing investigations into potential misuse of taxpayer funds.
With the Fed’s independence long viewed as a cornerstone of economic stability, lawmakers from both parties have reacted sharply to the news.
Republican Senator Thom Tillis of North Carolina said the investigation raised serious concerns about political interference and warned it could have lasting effects on the credibility of key institutions.
“If there were any remaining doubt whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none,” Tillis said in a statement on X.
If there were any remaining doubt whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none. It is now the independence and credibility of the Department of Justice that are in question.
— Senator Thom Tillis (@SenThomTillis) January 12, 2026
“It is now the independence and credibility of the Department of Justice that are in question. I will oppose the confirmation of any nominee for the Fed—including the upcoming Fed Chair vacancy—until this legal matter is fully resolved.”
Democrats echoed those concerns, arguing that the probe threatens the separation between politics and economic policymaking.
Senate Minority Leader Chuck Schumer said on X, “Donald Trump’s assault on the Fed’s independence continues, threatening the strength and stability of our economy.
“This is the kind of bullying that we’ve all come to expect from Donald Trump and his cronies. Anyone who is independent and doesn’t just fall in line behind Trump gets investigated.
“Jay Powell and the Fed aren’t the reason Trump’s economy and his poll numbers are in the toilet. If he’s looking for the person who caused that he should look in the mirror.”
The investigation comes as Trump prepares to announce his choice for the next Fed chair when Powell’s term ends in May, a decision that will shape U.S. monetary policy and influence the global economy for years to come.
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