US Justice Department Launches Criminal Probe into Fed Chair Jerome Powell

Mon Jan 12 2026 15:08:57 GMT+0200 (Eastern European Standard Time)

The US justice department has initiated a criminal investigation into Federal Reserve Chairman Jerome Powell following his testimony regarding renovations at the Fed. Powell claims the investigation is politically motivated due to his disagreements with former President Trump.

A criminal probe has been opened by the US justice department into Federal Reserve Chairman Jerome Powell, following his testimony about renovations to Fed buildings. Powell describes the investigation as unprecedented, linking it to pressure from former President Trump for not lowering interest rates. The inquiry raises concerns over the independence of the Federal Reserve and the political influence exerted over monetary policy.

Federal prosecutors have opened a criminal investigation into Federal Reserve Chairman Jerome Powell, he announced on Sunday. In a video, Powell disclosed that the US justice department had served subpoenas related to his testimony before a Senate committee regarding renovations to Federal Reserve buildings, suggesting a potential criminal indictment.

Powell characterized the investigation as 'unprecedented,' claiming it's a result of his refusal to lower interest rates under pressure from then-President Donald Trump. This development places Powell among others who clashed with Trump and subsequently faced legal scrutiny from the justice department.

The matter has drawn attention to whether the Fed can maintain its autonomy in setting interest rates or if it will succumb to political pressures. Powell emphasized his commitment to the rule of law, stating, 'No one, certainly not the chair of the Federal Reserve is above the law,' while warning about the implications of this investigation within the context of broader political pressures.

Trump, in an interview with NBC News, claimed ignorance of the attorney general's investigation into the Fed, although he has been vocally critical of Powell's performance. The probe intensifies an ongoing dispute between Trump and Powell, whom Trump appointed as Fed chair in 2017.

Senators from both sides of the aisle have expressed concerns regarding the implications of this investigation on the integrity of the Federal Reserve. Republican Senator Thom Tillis indicated that he would oppose any Fed nominations until the investigation concludes, while Democratic Senator Elizabeth Warren asserted that Trump aims to appoint a successor who would serve his interests.

As the criminal investigation unfolds, gold and silver prices surged amid market uncertainty, reflecting investors' concerns over the potential repercussions for US monetary policy.