- The Department of Justice has opened a criminal investigation into Jerome Powell, the sitting chair of the Federal Reserve.
- The probe focuses on allegations that Powell misled Congress about a headquarters renovation, a charge he called a “pretext.”
- The inquiry is overseen by U.S. Attorney Jeanine Pirro, drawing criticism from lawmakers and a vow by Senator Thom Tillis to block Fed nominations.
- Safe-haven metals rose sharply while Bitcoin moved modestly to about $92,000, per CoinGecko data.
- Analysts warn the case could politicize monetary policy and strengthen Bitcoin’s narrative as a non-sovereign hedge.
The Department of Justice has opened a criminal investigation into Jerome Powell, the sitting chair of the Federal Reserve, and Powell confirmed the inquiry in a Sunday statement. The action centers on allegations that Powell misled Congress about a headquarters renovation project. Powell called the move a direct threat to central bank independence.
Powell said the investigation is aimed at pressuring monetary policy. “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,” he wrote in the linked statement.
The probe is overseen by U.S. Attorney for the District of Columbia Jeanine Pirro, a Trump appointee. Senator Thom Tillis condemned the move and said he would block all Fed nominations until the issue is resolved in a posted statement.
Markets reacted quickly: Gold and silver rose about 2% and 5% respectively, while Bitcoin climbed roughly 1.7% to near $92,000, according to CoinGecko data. Commentators suggested the legal fight could create uncertainty around rate decisions; one tweet from Quinn Thompson noted the episode could pressure Fed leadership and linked to a possible leadership vacuum in a tweet.
Analysts weighed the longer-term implications. Jimmy Xue, co-founder and COO of Axis, said the case adds macro uncertainty and highlights Bitcoin’s perceived neutrality, calling it a hedge against legal or political pressure. “The legal proceedings have added a new layer of uncertainty to the macro front,” he said. Tim Sun, senior researcher at HashKey Group, warned of an “extremely dangerous precedent” if the case succeeds and said the episode could initially raise volatility before potentially shifting investor narratives toward decentralized assets.
Observers also pointed to broader political commentary, including a tweet noting Powell’s response and the Fed’s expected pause on rate cuts on January 28.
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