WASHINGTON — Federal Reserve Chair Jerome Powell revealed on Sunday that the Department of Justice has issued subpoenas to the central bank and has even threatened criminal charges related to his testimony about the Fed’s ongoing building renovations.
This action marks an extraordinary intensification of President Donald Trump’s ongoing conflict with the Federal Reserve, a body he has often criticized for not reducing interest rates as swiftly as he desires. The subpoena concerns Powell’s testimony before the Senate Banking Committee in June, specifically addressing the Fed’s $2.5 billion renovation of two office buildings—a project Trump labeled as overly extravagant this past summer.
In a video statement, Powell suggested that the threat of criminal proceedings is a strategic move aimed at compromising the Fed’s autonomy, particularly in its role of setting interest rates.
“The core issue here is whether the Fed can continue to base interest rate decisions on data and economic realities, or if monetary policy will be swayed by political influence and coercion,” Powell stated.
In response, the Justice Department, through a statement on Sunday, noted its inability to discuss specific cases. However, it mentioned that Attorney General Pam Bondi has directed US Attorneys to focus on investigating potential misuse of taxpayer funds.
Attempts to obtain comments from a spokesperson for U.S. Attorney Jeanine Pirro’s office were unsuccessful, as there was no immediate response to calls or text messages on Sunday.
The potential indictment has already drawn concern from one Republican senator, who said he’ll oppose any future nominee to the central bank, including any replacement for Powell, until “this legal matter is fully resolved.”
“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,” said North Carolina Sen. Thom Tillis, who sits on the Banking Committee, which oversees Fed nominations. “It is now the independence and credibility of the Department of Justice that are in question.”
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