Criminal Investigation Launched Against Fed Chair Jerome Powell

Mon Jan 12 2026 15:12:09 GMT+0200 (Eastern European Standard Time)

The US Justice Department opens a criminal probe into Federal Reserve Chairman Jerome Powell, who faces scrutiny over recent testimony regarding building renovations.

Federal prosecutors have initiated a criminal investigation into Jerome Powell, the Chairman of the Federal Reserve, allegedly related to his testimony about renovations of Fed buildings. Powell claims this unprecedented probe stems from political pressure linked to his independence in setting interest rates despite repeated requests from former President Trump. The probe escalates tensions in the ongoing struggle between the Fed and the Trump administration.

Federal prosecutors have opened a criminal investigation into Federal Reserve Chairman Jerome Powell, he said on Sunday.

In a video announcing the probe, Powell said the US Justice Department served the agency with subpoenas and threatened a criminal indictment over testimony he gave to a Senate committee about renovations to Federal Reserve buildings.

He called the probe unprecedented and said he believed it was opened due to him drawing Donald Trump's ire over refusing to lower interest rates despite repeated public pressure from the president.

The Fed chair is the latest to come at odds with Trump and then face a criminal investigation by the US Justice Department.

The BBC has contacted the Justice Department and the White House for comment.

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, Powell said.

Trump said in an interview with NBC News that he did not have any knowledge of the Justice Department's investigation into the Fed.

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, he said of Powell.

The probe, which prosecutors have not confirmed, would signal a fresh escalation in Trump's ongoing dispute with Powell, who the president nominated for the role as Fed chair in 2017.

Trump has repeatedly threatened to remove Powell, whom he has criticised for not cutting interest rates as quickly as the president would have liked. In the second half of 2025, the Fed cut interest rates three times.

The president has consistently blamed his predecessor, Joe Biden, and interest rates for inflation and costs in the US.

Critics have raised concerns that Trump's pressure to oust the Fed chair would muddy the institution's authority to set interest rates independently from presidents.

Senator Elizabeth Warren, a Democrat, stated that she believed Trump's plan was to push Powell off the Fed board and install a more compliant successor.

Powell's investigation will be overseen by the US Attorney's Office for the District of Columbia.

The criminal probe into Powell, together with news of continued unrest in Iran, sparked a jump in the price of precious metals.

The price of gold increased by 1.4% amid the uncertainty, while silver reached a record high before slightly declining.