This article was first published on TurkishNY Radio.
Federal Reserve Chair Jerome Powell said U.S. prosecutors are pursuing a criminal investigation tied to his congressional testimony. The Fed chair confirmed that the Justice Department has served grand jury subpoenas on the Federal Reserve.
The case adds fresh tension between the central bank and the White House. The Fed chair disclosed the subpoenas in a video statement released Sunday evening, January 11.
He said the inquiry relates to his June 2025 testimony before the Senate Banking Committee. That testimony focused on cost overruns linked to a $2.5 billion renovation of the Fed’s historic headquarters in Washington, D.C.
Fed Chair Rejects Claims of False Testimony
Powell said investigators are reviewing whether he misled lawmakers about the scale and expense of the project. The Fed chair rejected that claim. He said Congress had been kept informed through testimony and public disclosures.
The investigation has triggered concerns about central bank independence. The Fed chair suggested the renovation issue is being used as political leverage.
He framed the probe as retaliation for resisting President Donald Trump’s demand for faster interest rate cuts. The dispute now extends beyond budgets into a wider power struggle.
DOJ Subpoenas Put Fed Chair in Legal Spotlight
The Fed chair said the Justice Department issued grand jury subpoenas to the Federal Reserve. He did not detail the full scope of the requests. However, he described the action as part of a criminal inquiry.
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Grand jury subpoenas typically seek documents and records. They can also request testimony. The Fed chair said the investigation is connected to his statements to lawmakers.
Renovation Costs Drive the Core Concerns
The dispute centers on a $2.5 billion renovation of the Fed’s headquarters and nearby buildings. The project involves upgrades to historic structures. It also includes modernization and security improvements.
The Fed chair said the probe is focused on cost overruns. Investigators are examining whether lawmakers received accurate descriptions of spending. Powell said he believes Congress was given consistent updates.
Accusations Stem From Rep. Anna Paulina Luna
The investigation followed a referral from Republican Rep. Anna Paulina Luna. She accused Powell of making false statements to Congress. That allegation became the trigger for a formal review.
Powell said he rejects the accusation. The Fed chair argued the claims rely on selective interpretation. He said details about costs were included in public materials.
U.S. Attorney’s Office Approved Inquiry in November
Powell said the U.S. attorney’s office for the District of Columbia approved the investigation in November. That decision advanced the matter beyond political criticism. It also moved it into the criminal justice system.
The Fed chair said the timing is important. He suggested the inquiry gained momentum during a period of heightened pressure on monetary policy.
Fed Chair Warns of Political Pressure on Rate Policy
Powell framed the issue as more than a renovation dispute. The Fed chair said it raises a direct question about who controls monetary policy. He argued interest rates must reflect evidence and economic conditions.
He also warned about the damage from political intimidation. The Fed chair suggested the renovation issue is being used as a pretext. He said it is tied to demands for faster rate cuts.
Trump Attacks Intensified as Rates Stayed Higher
President Donald Trump has repeatedly criticized Powell’s rate decisions. Trump has also questioned the renovation’s scale and cost. His allies spent much of the past year attacking the Fed over the project.
Trump has suggested legal consequences in past comments. Still, he denied directing the investigation in an NBC interview. The Fed chair said the dispute cannot be separated from ongoing policy pressure.
Pam Bondi and Fed Leadership Moves Raise Stakes
Attorney General Pam Bondi said the probe is about accountability. She also cited taxpayer funds as the key concern. Her framing positions the case as a public spending issue.
Meanwhile, the administration has moved to reshape Fed leadership. It installed a close ally on the Board of Governors. It also attempted to remove Governor Lisa Cook over unproven allegations. Critics say these steps deepen the conflict around the Fed chair.
Senate Backlash Highlights Independence Concerns
The investigation has drawn criticism from both parties. Republican Senator Thom Tillis warned it could weaken Fed independence. He said he would oppose future Fed nominees until the issue is resolved.
Analysts say this reaction shows institutional alarm. Markets rely on the Fed acting independently. Any perception of political control can raise uncertainty in rate expectations.
Conclusion
The Fed chair said he intends to remain in office. He said the central bank must continue pursuing price stability and maximum employment. He described the investigation as a serious challenge to institutional independence. With subpoenas now active, the Fed chair faces legal scrutiny during a period of intense political pressure.
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Frequently Asked QuestionsAbout Fed Chair
1- Why is the Fed chair being investigated?
The Fed chair is being investigated over whether he misled Congress about the cost of the Fed renovation project.
2- What was the testimony about?
Powell testified in June 2025 before the Senate Banking Committee about renovation spending and cost overruns.
3- Who initiated the referral?
Republican Rep. Anna Paulina Luna made the referral, accusing Powell of false statements to Congress.
4- What did Powell say in response?
The Fed chair denied misleading lawmakers and said Congress was kept informed through disclosures.
