Federal Prosecutors Launch Criminal Investigation Into Fed Chair Jerome Powell – RedState
Federal prosecutors have opened a criminal investigation into Federal Reserve Chairman Jerome Powell and the $2.5 billion renovation of his Washington headquarters, escalating a yearslong standoff between the Trump administration and the nation’s most powerful economic institution.
According to Powell, the Justice Department served the Federal Reserve with grand jury subpoenas on Friday, threatening it with criminal charges related to its testimony before the Senate Banking Committee last June about the multi-year renovation project.
Video message from Federal Reserve Chairman Jerome H. Powell: https://t.co/5dfrkByGyX pic.twitter.com/O4ecNaYaGH
– Federal Reserve (@federalreserve) January 12, 2026
In an extraordinary video statement released Sunday evening, Powell said the investigation was aimed at “whether the Fed will be able to continue setting interest rates based on economic evidence and conditions — or whether, instead, monetary policy will be driven by political pressure or intimidation.”
“The threat of criminal prosecution 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 president’s preferences,” Powell said in his statement.
What the survey covers
The New York Times reported that the U.S. Attorney’s Office for the District of Columbia, led by Trump appointee Jeanine Pirro, opened the investigation in November. The investigation is examining whether Powell lied to Congress about the scale and cost of renovating the Federal Reserve headquarters.
The renovation project, which covered the historic Marriner S. Eccles Building and the adjacent Federal Reserve East Building, saw costs rise from initial 2021 estimates of $1.9 billion to $2.5 billion today. According to Fed records, the cost increase is due to inflation, unforeseen construction problems including significant asbestos contamination, blast-resistant safety improvements and rising material costs.
Justice Department spokesman Chad Gilmartin declined to comment on the investigation, but said in a statement to CNN that the attorney general wants to “prioritize investigations into any abuse of taxpayer dollars.”
Powell defended the Fed’s transparency during the renovation project. “This new threat does not concern my testimony last June or the renovation of the Federal Reserve buildings. It does not concern the oversight role of Congress; the Fed, through its testimony and other public disclosures, has done everything possible to keep Congress informed of the renovation project,” he said. “These are pretexts.”
The essentials
Powell’s term as Fed chair ends in May 2026. Trump told The New York Times last week that he has already chosen Powell’s replacement, although he has not publicly announced his choice.
Powell said the criminal investigation would not force his departure.
“I will continue to do the job the Senate confirmed to me, with integrity and a commitment to serving the American people,” he said in his video statement.
The investigation is taking place as the Federal Reserve faces difficult economic conditions. Inflation has moderated but remains above the Fed’s 2% target, while the labor market has shown signs of slowing.
