Fed Chair Powell under criminal investigation, blames Trump

Federal prosecutors have opened a criminal investigation of Federal Reserve Chairman Jerome Powell, he confirmed on Sunday evening.

Powell said the probe was the result of the Fed “setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of” President Donald Trump.

“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 said in a video statement tweeted by the Fed’s X account.

Powell said that on Friday “the Department of Justice served the Federal Reserve with grand jury subpoenas threatening a criminal indictment related to my testimony before the Senate Banking Committee last June.”

“That testimony concerned in part, a multi-year project to renovate historic Federal Reserve office buildings,” he said.

A person familiar with the investigation told CNBC that they would not dispute the idea that the probe of Powell is related to the building renovation and his testimony to Congress.

“I have deep respect for the rule of law and for accountability in our democracy. No one, certainly not the chair of the Federal Reserve is above the law, but this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure,” Powell said in his statement.

“No one — certainly not the chair of the Federal Reserve — is above the law,” he said.

“But this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure,” Powell said.

“This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress’s oversight role; the Fed through testimony and other public disclosures made every effort to keep Congress informed about the renovation project. Those are pretexts.”

The New York Times first reported the probe, citing officials briefed on the matter.

The investigation is being overseen by the U.S. Attorney’s Office for the District of Columbia, according to the newspaper.

That office is led by U.S. Attorney Jeanine Pirro, a former New York state prosecutor and Fox News host, who was appointed to that job by Trump.

Trump has repeatedly blasted Powell for the Fed not cutting interest rates as much and as quickly as the president has demanded since entering the White House in January 2025.

The White House referred questions about the probe to the DOJ.

A DOJ spokesperson, in a statement to CNBC without saying the comment was about Powell, said, “The Attorney General has instructed her US Attorneys to prioritize investigating any abuse of taxpayer dollars.”

Trump has made no secret he intends to remove Powell as chair after his term expires in May.

The two leading contenders are believed to be former Governor Kevin Warsh and Kevin Hassett, the current director of the National Economic Council.

Sen. Thom Tillis, a North Carolina Republican, and a member of the Senate Banking Committee, blasted the investigation of Powell and said that he would oppose the nomination of Powell’s replacement by Trump, and any other Fed Board nominee, “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,” Tillis said in a statement.

“It is now the independence and credibility of the Department of Justice that are in question,” the senator said.

Sen. Elizabeth Warren of Massachusetts, the ranking Democrat on the Banking Committee, echoed Tillis.

“As Donald Trump prepares to nominate a new Fed Chair, he wants to push Jerome Powell off the Fed Board for good and install another sock puppet to complete his corrupt takeover of America’s central bank.” Warren said in a statement.

“Trump is abusing the authorities of the Department of Justice like a wannabe dictator so the Fed serves his interests, along with his billionaire friends,” Warren said. “This Committee and the Senate should not move forward with any Trump nominee for the Fed, including Fed Chair.”

Brian Jacobsen, chief economic strategist at Annex Wealth Management, in a note to clients on Sunday, wrote, “President Trump is trying to bring criminal charges against Powell related to…