- Federal prosecutors have opened a criminal probe and issued grand jury subpoenas related to the Federal Reserve chair’s testimony about a $2.5 billion headquarters renovation.
- Jerome Powell says the investigation threatens central bank independence and issued a public video statement defending Fed decision-making.
- Lawmakers and market analysts warn the probe raises risks to monetary policy independence and U.S. dollar stability.
- Krishna Guha and other figures expressed shock, while Senate leaders debated confirmations and responses.
- The administration says the Justice Department is prioritizing taxpayer-protection cases, and a replacement for the Fed chair is being planned for announcement by May.
Federal prosecutors launched a criminal investigation into the Federal Reserve chair after issuing grand jury subpoenas last Friday, a development made public on Sunday about testimony concerning the Fed’s $2.5 billion headquarters renovation. The probe examines whether the chair accurately described the scope and costs of the renovation and began after Rep. Anna Paulina Luna referred the matter to the Department of Justice.
Jerome Powell posted a video statement through the central bank that linked the investigation to growing political pressure on interest-rate decisions. He warned that the probe could punish the Fed for setting policy based on economic evidence rather than political preferences and 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.”
Powell added that the matter is about whether monetary policy will be guided by facts or by intimidation, saying, “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.”
Markets reacted with concern about potential impacts on Fed independence and U.S. dollar stability. Krishna Guha, vice chairman at Evercore ISI, described the development as deeply disturbing, and Senate figures voiced political opposition tied to the investigation.
Senate Minority Leader Chuck Schumer criticized the move as intimidation and warned against politicizing oversight, saying, “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.” Republican Sen. Thom Tillis said he will oppose Fed confirmations until the probe concludes.
Donald Trump denied knowledge of the probe and said, “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.” A spokesperson for Attorney General Pam Bondi said the Justice Department is prioritizing investigations into alleged abuse of taxpayer dollars.
The White House plans to nominate a successor to the Fed chair and expects to announce a candidate by May, with Kevin Hassett among those mentioned as a possibility. Markets and policymakers will monitor the probe for its implications on central bank independence and currency stability.
✅ Follow BITNEWSBOT on Telegram, Facebook, LinkedIn, X.com, and Google News for instant updates.
Previous Articles:
- ProBit Global Announces Complete Exchange Shutdown, Affecting Users in 190+ Countries
- Coinbase threatens to withdraw support over stablecoin yield
- USDT: Lifeline for Citizens, Tool for Sanctions Evasion 2026
- DOJ Sues Fed Chair Powell, Sparking Fed Independence Fears!!
- X to Launch Smart Cashtags; In-App Trading Teased Coming Feb
