US Fed chair Jerome Powell under criminal investigation

Federal prosecutors have opened a criminal investigation against Federal Reserve Chairman Jerome Powell, he announced Sunday.

In a In a highly unusual move, Powell revealed that the U.S. Department of Justice (DoJ) had subpoenaed the agency and threatened to criminally charge him for his testimony before a Senate committee about the renovation of Federal Reserve buildings.

Calling the investigation “unprecedented,” Powell said he believed it was initiated because of Donald Trump’s anger over the Fed’s refusal to cut interest rates despite repeated public pressure from the president.

Trump said he “knows nothing” about the investigation. The DoJ has been contacted for comment.

Until now, the long-running feud between Trump and Powell has been largely one-sided, with the US president calling the banker “Mr. Too late” and a “numb skull”.

Powell’s statement Sunday is the first time he has publicly and vigorously opposed Trump, warning that the independence of the U.S. central bank is at stake.

“It’s a question of whether the Fed will be able to continue to set interest rates based on evidence and economic conditions, or whether monetary policy will instead be driven by political pressure or intimidation,” Powell said.

“I have deep respect for the rule of law and for accountability in our democracy. No one, certainly not the Chairman of the Federal Reserve, is above the law, but this unprecedented action must be viewed in the broader context of the administration’s continued threats and pressures,” he continued.

Trump said in an interview with NBC News on Sunday that he had no knowledge of the DoJ’s investigation into the Fed.

“I don’t know, but he’s certainly not very good at the Fed, and he’s not very good at building buildings,” he said of Powell.

The Fed is undertaking the first renovation of two buildings, the Eccles and 1951 Constitution Avenue buildings, since their construction in the 1930s.

The “renovation and modernization” of buildings includes health and safety works such as the removal of asbestos and lead contamination.

The Fed said the renovations would reduce its costs over time. But Trump has criticized the project’s exorbitant costs, arguing it will cost $3.1 billion (£2.3 billion), far more than the $2.5 billion the Fed had forecast.

Powell was the latest to clash with Trump before becoming the subject of a criminal investigation by the US Justice Department.

Trump appointed Powell as Fed chairman in 2017 during his first term as president.

Powell is expected to resign in May and Trump is expected to name a successor as president by the end of the month.

However, the DoJ investigation could hamper the process.

North Carolina Sen. Thom Tillis, a Republican on the Senate Banking Committee, said he would oppose Trump’s nomination of Powell’s replacement, as well as any other nominee to the Fed board, “until this legal issue is fully resolved.”

“If there remained any doubt about whether advisors within the Trump administration are actively pushing to end the independence of the Federal Reserve, there should be none,” Tillis said in a statement.

“It is now the independence and credibility of the Ministry of Justice that are in question,” declared the senator who is due to retire this year.

Democratic Sen. Elizabeth Warren said she believed Trump’s plan was to push Powell off the Fed board for good and “install another puppet to complete his corrupt takeover of the U.S. central bank.”

“This committee and the Senate should not nominate a Trump nominee for the Fed, including for Fed chair,” she said.

Powell’s investigation will be overseen by the U.S. Attorney’s Office for the District of Columbia, according to The New York Times, which was first to report on the investigation.

Trump has repeatedly threatened to impeach Powell, whom he has criticized for not cutting interest rates as quickly as the president would have liked.

During the second half of 2025, the Fed cut interest rates three times.

The president has always blamed US inflation on his predecessor, Joe Biden, and interest rates.

Critics have expressed concerns that Trump’s push to oust the Fed chairman would undermine the institution’s power to set interest rates independently of presidents.

April Larusse, head of investment specialists at Insight Investment, told the BBC’s Today show that “it’s really not true that the Federal Reserve hasn’t done anything on interest rates, so it feels like maybe it’s pressure that’s not really justified.”

The criminal investigation into Powell, along with news of continued unrest in Iran, triggered a rally in precious metals prices.

The price of gold – which is often seen as a safer asset in times of uncertainty – rose 1.4% to $4,572.36 an ounce on Monday, after hitting a record $4,600.33 earlier.

Silver also hit a record high – $84.58 an ounce – before falling back to $83.26 an ounce, up 5.4% for the day.

Trump had previously targeted Lisa Cook, governor of the US central bank, whom he tried to fire for alleged mortgage fraud.

The case has been blocked by a US federal court and will be heard by the Supreme Court later this month.

Criminal charges brought by Trump’s Justice Department against political adversaries like New York Attorney General Letitia James, who filed a civil fraud suit against Trump in 2024, and former Federal Bureau of Investigation boss James Comey, were also dismissed by a court.

Comey was charged with making false statements and obstructing justice. He was fired by Trump during his first term after leading an investigation into Russian interference in the 2016 US presidential election, which Trump won against Hillary Clinton.

Comey and James have maintained their innocence and said the prosecution was politically charged.

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