Federal prosecutors have opened a criminal investigation into Jerome Powell, the powerful chair of the Federal Reserve.
The US Attorney’s Office for the District of Columbia is examining whether Powell misled Congress about the scope and cost of a multibillion-dollar renovation of the Fed’s Washington headquarters, according to officials briefed on the matter.
Powell responded on Sunday night with a defiant message that claimed the criminal probe was directly the result of President Trump’s threats over Fed policy.
‘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,’ he said.
‘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.’
The investigation plunges the nation’s central bank into a political and legal firestorm, dramatically escalating President Donald Trump’s long-simmering war with the man who controls US interest rates.
The inquiry was approved in November by US attorney Jeanine Pirro, a longtime Trump ally who was appointed to lead the DC office last year.
The investigation focuses on Powell’s congressional testimony, internal records, and spending tied to a sweeping overhaul of the Federal Reserve’s historic buildings near the National Mall – an ambitious project that has ballooned hundreds of millions of dollars over budget.
Trump denied any involvement in the probe on Sunday night, but blasted the Fed chair for his management of the central bank.
Federal prosecutors have opened a criminal investigation into Jerome Powell, the powerful chair of the Federal Reserve. Powell responded on Sunday night with a defiant message
Trump has repeatedly attacked Powell for refusing to sharply cut interest rates, publicly floating his removal and accusing him of ‘incompetence’
‘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,’ Trump said.
The move represents the most serious legal threat Powell has faced since becoming Fed chair and places the independence of the central bank squarely in the political crosshairs.
Trump has repeatedly attacked Powell for refusing to sharply cut interest rates, publicly floating his removal and accusing him of ‘incompetence.’
The president has also suggested legal action over the renovation project, which is now estimated to cost roughly $2.5 billion.
In his rare video message released on Sunday night, Powell called the investigation ‘unprecedented’ and directly challenged its legitimacy.
‘This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings,’ Powell said.
‘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.’
Officials familiar with the investigation said Powell and the Federal Reserve have been served with grand jury subpoenas, and prosecutors in Pirro’s office have repeatedly requested documents related to the renovation.
The Justice Department has not publicly detailed the evidence under review.
A spokesperson for Attorney General Pam Bondi declined to comment on the Powell probe but said Bondi has ‘instructed her US attorneys to prioritize investigating any abuses of taxpayer dollars.’
The US Attorney’s Office for the District of Columbia is examining whether Powell misled Congressabout the scope and cost of a multibillion-dollar renovation of the Fed’s Washington headquarters. The pair are pictured in July touring the Federal Reserve
The inquiry was approved in November by Jeanine Pirro, a longtime Trump ally appointed to lead the US Attorney’s Office for the District of Columbia, last year
Trump has conitually blasted Powell about the cost of a massive renovation of the Federal Reserve’s building in DC
The investigation lands at a pivotal moment. Trump told The New York Times last week that he has already decided whom he wants to replace Powell with and is expected to announce his choice soon.
Kevin A. Hassett, Trump’s top economic adviser, has emerged as a leading contender.
While Powell’s term as Fed chair expires in May, his term as a member of the Federal Reserve’s board of governors runs through January 2028.
Powell has not said whether he intends to remain at the central bank beyond this year.
The renovation project at the center of the controversy began in 2022 and is scheduled to be completed in 2027.
It involves modernizing and expanding the Marriner S. Eccles Building and a second Fed building on Constitution Avenue – structures that date back to the 1930s and have not undergone comprehensive renovations in nearly a century.
Fed officials have said the overhaul is necessary to remove asbestos and lead, upgrade aging infrastructure, and bring the buildings into compliance with accessibility laws for people with disabilities.
In June, Trump estimated that if Powell were to lower the Fed’s interest rates that the US economy could see a $800 billion boom
But the project’s escalating price tag – now estimated to be roughly $700 million over budget – has drawn fierce scrutiny from Republicans and Trump allies.
A 2021 planning document described features including private dining areas for top officials, new marble installations, upgraded elevators, and a rooftop terrace for staff.
When pressed about those elements during congressional testimony last June, Powell forcefully denied that they were part of the current plan.
‘There’s no V.I.P. dining room; there’s no new marble,’ Powell told lawmakers.
‘We took down the old marble, we’re putting it back up. We’ll have to use new marble where some of the old marble broke. But there’s no special elevators. There’s just old elevators that have been there.’
Powell added that the plans had ‘continued to evolve’ and that several features initially proposed were later scrapped.
President Donald Trump, Federal Reserve Chair Jerome Powell, and U.S. Senator Tim Scott (R-SC) tour the Federal Reserve Board building last July
A view shows the Marriner S. Eccles Federal Reserve Board Building as a massive renovation continues on the building and the 1951 Constitution Avenue Building
The Washington Monument is visible beyond the 1951 Constitution Avenue Building as a massive renovation continues on the building and the Marriner S. Eccles Federal Reserve Board Building
After his testimony, the Fed published a detailed FAQ on its website reaffirming Powell’s statements, along with photos, annotations, and a virtual tour of the renovation.
The central bank has attributed the cost overruns to rising prices for materials and labor, as well as unexpected discoveries such as more asbestos than anticipated and soil contamination.
Launching an investigation, however, does not guarantee criminal charges. Prosecutors must still convince a federal grand jury that sufficient evidence exists to bring an indictment – and to survive judicial scrutiny.
Recent history suggests that is no sure thing. Indictments brought last year against former FBI Director James Comey and New York Attorney General Letitia James were dismissed by a federal judge.
A separate investigation into Senator Adam Schiff of California has yet to produce charges.
