Federal Reserve Chair Jerome Powell accused the Trump administration of using the threat of criminal prosecution to pressure the central bank over interest rates, casting the Justice Department’s move as a direct challenge to the Fed’s independence.
In a video statement released Sunday, January 11, Powell said the Department of Justice served the Federal Reserve with grand jury subpoenas on Friday and threatened a criminal indictment tied to his June testimony before the Senate Banking Committee about a multiyear renovation of Fed office buildings.
Powell framed the action not as a dispute over construction costs or congressional oversight, but as retaliation for monetary policy decisions that have frustrated President Donald Trump.
“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,” Powell said. “But this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.”
Video message from Federal Reserve Chair Jerome H. Powell: https://t.co/5dfrkByGyX pic.twitter.com/O4ecNaYaGH
— Federal Reserve (@federalreserve) January 12, 2026
Powell said the Fed had made “every effort to keep Congress informed about the renovation project” through testimony and public disclosures, arguing that the renovation was being used as a pretext. “This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings,” he said. “Those are pretexts.”
Instead, Powell claims that the core issue is whether the Fed can continue to set interest rates free from political interference.
“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.
The Justice Department declined to comment on any specific investigation, saying in a statement that Attorney General Pam Bondi “has instructed her US Attorneys to prioritize investigating any abuse of tax payer [sic] dollars,” per the Associated Press.
The subpoena marks an escalation in a long-running clash between Trump and Powell, whom the President has repeatedly criticized for not cutting interest rates more aggressively, The Dallas Express previously reported.
Trump claims he was unaware of the Justice Department’s investigation and denied directing it, according to an interview with NBC News.
Powell, who was first appointed to the Federal Reserve under President Barack Obama and elevated to chair by Trump during his first term, emphasized his record of serving across administrations.
“I have served at the Federal Reserve under four administrations, Republicans and Democrats alike,” he said. “In every case, I have carried out my duties without political fear or favor, focused solely on our mandate of price stability and maximum employment.”
The episode has prompted concern from some lawmakers.
Sen. Thom Tillis of North Carolina said the move raised questions about the independence of both the Federal Reserve and the Justice Department, according to statements reported by AP.
Powell is scheduled to step down as Fed chair in May, though he may remain on the central bank’s board.
“Public service sometimes requires standing firm in the face of threats,” Powell said. “I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people.”
