The Department of Justice has opened a criminal investigation into Jerome Powell and the Federal Reserve, a significant escalation in Donald Trump’s extraordinary attack on the US central bank.
In a blistering statement on Sunday, Powell argued he had been threatened with criminal charges because the Fed had set interest rates “based on our best assessment of what will serve the public, rather than following the preferences of the President”.
Trump has repeatedly blasted the Powell and the Fed for declining to bow to his demand for rapid rate cuts.
The US attorney’s office in the District of Columbia has opened a criminal investigation into Federal Reserve chair Jerome Powell over the central bank’s renovation of its Washington headquarters and whether Powell lied to Congress about the scope of the project, the New York Times reported on Sunday.
The inquiry, which includes an analysis of Powell’s public statements and an examination of spending records, was approved in November by Attorney Jeanine Pirro, the NYT reported citing officials briefed on the situation.
Powell said the Department of Justice had served the Fed with grand jury subpoenas on Friday, threatening a criminal indictment related to his testimony before the Senate Banking Committee last June, regarding renovations to the Fed’s historic office buildings in Washington DC.
Allies of Trump spent months last year accusing the Fed of mishandling the multibillion-dollar renovations. Trump had repeatedly threatened legal action.
In a statement on Sunday evening, Powell 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.”
“I have served at the Federal Reserve under four administrations, Republicans and Democrats alike. 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.
“Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people.”
The White House and the Department of Justice did not immediately respond to requests for comment.
More details soon…
