US Federal Reserve Chairman Jerome Powell under criminal investigation

Federal prosecutors have opened a criminal investigation into Federal Reserve Chairman Jerome Powell, he said Sunday.

In a highly unusual move, Chairman Powell revealed that the U.S. Department of Justice (DoJ) had issued subpoenas and threatened criminal prosecution for testimony he gave to a Senate committee about renovations to the Federal Reserve (Fed) building.

Powell called the investigation “unprecedented” and said he believed it was launched because of President Donald Trump’s anger over the Federal Reserve’s refusal to cut interest rates despite Trump’s repeated public pressure.

President Trump said he “knew nothing” about the investigation. The DoJ has been contacted for comment.

So far, the long-running feud between Trump and Powell has been one-sided, with the US president calling the banker “too late” and an “idiot.”

Powell’s statement Sunday marks the first time he has publicly spoken strongly against President Trump, warning that the independence of the U.S. central bank is at risk.

“It’s about whether the Fed can continue to set interest rates based on evidence and economic conditions, or whether monetary policy will be determined by political pressure or threats,” Powell said.

“I have deep respect for the rule of law and accountability in our democracy,” he said. “No one, not even the Federal Reserve Chairman, is above the law, but this unprecedented action must be viewed in the broader context of the administration’s threats and ongoing pressure.”

In an interview with NBC News that day, President Trump said he had no knowledge of the Justice Department’s investigation into the Federal Reserve.

He said of Powell, “I don’t know anything about that, but he’s certainly not very good at the Fed and he’s not very good at building it.”

The Federal Reserve is undergoing the first renovations of two buildings since their construction in the 1930s: the Eccles Building and the 1951 Constitution Avenue Building.

The “overhaul and modernization” of the building will include health and safety work such as removal of asbestos and lead contamination.

The Fed said the overhaul will reduce costs over time. But President Trump has criticized the soaring costs, claiming the project would cost as much as $3.1 billion (£2.3 billion). This figure is much higher than the Fed’s forecast of $2.5 billion.

Powell is the latest person to clash with Trump before facing a criminal investigation by the U.S. Justice Department.

President Trump nominated Powell to the position of Federal Reserve Chairman during his term as president in 2017.

Chairman Powell is scheduled to resign in May, and President Trump is expected to appoint a successor by the end of this month.

However, the DoJ investigation could hinder the process.

Senator Thom Tillis, a Republican on the Senate Banking Committee, said he would oppose Trump and other Federal Reserve nominees nominating Powell to replace him “until the legal issues are fully resolved.”

“If there were any remaining doubts about whether advisors within the Trump administration are actively pushing to end the independence of the Federal Reserve, those doubts should now be eliminated,” Tillis said in a statement.

“What is at stake now is the independence and credibility of the Justice Department,” said the senator, who is scheduled to retire this year.

Senator Elizabeth Warren, a Democrat, said Trump’s plan is to permanently remove Chairman Powell from the Federal Reserve Board and “install yet another sock puppet to complete his takeover of America’s corrupt central bank.”

“This committee and the Senate should not move forward with any of President Trump’s nominees, including for Federal Reserve Chair,” she said.

According to the New York Times, which first reported the investigation, Powell’s investigation will be overseen by the U.S. Attorney’s Office for the District of Columbia.

President Trump has repeatedly threatened to fire Chairman Powell, whom he has criticized for not cutting interest rates as quickly as he would like.

The Federal Reserve cut interest rates three times in the second half of 2025.

The president has consistently blamed his predecessor, Joe Biden, and interest rates as the cause of U.S. inflation.

Critics have raised concerns that President Trump’s pressure to oust the Federal Reserve chairman will cloud the Fed’s authority to set interest rates independently of the president.

“It’s not true that the Fed has done nothing about interest rates, so perhaps this actually feels like unjustified pressure,” April Larusse, investment expert at Insight Investment, told the BBC’s Today programme.

News of the criminal investigation into Powell and continued unrest in Iran sparked a surge in precious metal prices.

Gold prices, considered a safer asset in uncertain times, rose 1.4% to $4,572.36 an ounce on Monday, hitting the previous day’s high of $4,600.33.

Silver also hit an all-time high of $84.58 per ounce before falling back to $83.26 per ounce, up 5.4% for the day.

President Trump previously took aim at Lisa Cook, the head of the U.S. central bank whom he was trying to fire over allegations of mortgage fraud.

The case was dismissed by a U.S. federal court and is scheduled to be heard by the Supreme Court later this month.

Criminal charges filed by Trump’s Justice Department against political opponents, including New York Attorney General Letitia James and former FBI Director James Comey, who filed a civil fraud lawsuit against Trump in 2024, were also dismissed by the court.

Former Director Comey was indicted on charges of making false statements and obstruction of justice. He was fired by President Trump during his first term after investigating allegations of Russian interference in the 2016 U.S. presidential election, which Trump won over Hillary Clinton.

Both Comey and James have pleaded not guilty and said the prosecution was politically charged.

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