Fed Chairman Powell blasted Trump’s DOJ investigation as political pressure
Crypto journalist
Anas Hasan
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Federal Reserve Chairman Jerome Powell made a rare televised appearance accusing the Trump administration of using criminal threats to pressure the central bank to lower interest rates.
Powell confirmed Friday that the Justice Department had served the Fed with a grand jury subpoena, threatening indictment over testimony he gave in June 2025 regarding multi-year renovations to the Federal Reserve's headquarters buildings.
“The risk of criminal charges is a result of the Federal Reserve setting interest rates based on our best assessment of what will serve the public rather than following the president's preferences,” he said.
He denounced the investigation as an attack on federal independence, warning that monetary policy risks being driven by “political pressure or intimidation” rather than economic evidence.
Details of the investigation have emerged amid political tensions.
The criminal investigation approved in November by U.S. Attorney Jeanine Pirro, a longtime Trump ally, focuses on whether Powell misled Congress about the scope and cost of the $2.5 billion headquarters renovation project.
The New York Times reported that prosecutors have contacted Powell's staff several times to request documents about the renovations, which begin in 2022 and are estimated to cost $700 million.
Crypto News previously reported that Trump said he had “no knowledge” of the investigation, but criticized Powell's performance.
“I don't know anything about it, but it's certainly not very good at the Fed, and it's not very good at building buildings,” Trump said.
He dismissed the subpoena on interest rate policy, saying, “I don't even think about doing that.”
Powell addressed the reform controversy directly in June's testimony, rejecting the features expressed in earlier proposals.
“No VIP dining room; no new marble,” he testified.
“We took the old marble down, we're putting it up.” The federation published documents supporting Powell's statements, citing asbestos contamination, soil issues and material inflation.
Bipartisan backlash threatens Trump's federal nominations.
The investigation drew immediate opposition from both parties in Congress.
Sen. Tom Tillis, a North Carolina Republican and member of the Banking Committee, has vowed to block all Trump Fed nominees until the matter is resolved.
“If there was any doubt that advisers in the Trump administration were actively pushing to end the Federal Reserve's independence, there shouldn't be any now,” Tillis told the X-Post.
Sen. Elizabeth Warren, the top Democrat on the committee, also accused Trump of treating Justice Department officials like “an authoritarian dictator who is running the feds with his billionaire cronies.”
She called on the Senate to suspend all Trump-appointed Federal Reserve officials, including the upcoming vacancy.
Powell's term as chair expires in May, although his board seat will last until January 2028.
Trump told the New York Times last week that his decision on Powell's replacement was made by National Economic Council Director Kevin Hassett.
Hassett previously said he owned between $1 million and $5 million in Coinbase stock and served on the exchange's regulatory advisory board, along with industry calls for a pro-crypto Fed chairman.
Markets react as Fed Independence Concerns mount
Financial markets reacted negatively to the escalating conflict. The dollar fell broadly, U.S. stock futures fell, and Treasury futures rose as investors weighed implications for central bank autonomy.
“By trying to influence the central bank through aggressive legal threats against individual officials, the administration could raise inflation, erode the dollar's safe haven and trigger a sharp rise in long-term bond yields,” Carl Shamotta, market strategist at Corpay in Toronto, told Reuters.
Christopher Hodge, chief U.S. economist at Natixis, warned that continued pressure could eventually trigger a market revolt.
“The market has shaken off a lot of noise around the Fed and the independence of the Fed and I think it will probably do so again, but sometimes things get cut off,” Hodge said.
The investigation follows a broader pattern within the Trump administration of challenging the Fed's decisions and pursuing the agency from accusations.
Indeed, the White House announced last week that it was creating a new Justice Department unit to enforce fraud, despite criminal charges against Trump targets including James Comey and Letitia James being dismissed by prosecutors.
Despite the threats, Powell ended his statement in protest.
“Public service sometimes requires standing firm in the face of threats,” he said. “I will continue to do the job the Senate has confirmed me to do with integrity and commitment to serving the American people.”
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