Justice Department Investigates Fed Chair Powell Over Building Renovations

The Department of Justice (DOJ) has launched a criminal investigation into Federal Reserve Chair Jerome Powell, focusing on his June 2025 testimony before the Senate Banking Committee regarding a $2.5 billion renovation of the Federal Reserve's office buildings in Washington, D.C. Powell disclosed that the DOJ served the Federal Reserve with grand jury subpoenas on January 10, 2026, threatening a criminal indictment related to his testimony on the renovation project.

The renovation, aimed at modernizing the Marriner S. Eccles Building and an adjacent structure, has faced scrutiny over its escalating costs and scope. Powell has defended the project, stating that earlier proposals for luxury features were eliminated as plans evolved. In his testimony, he emphasized that the renovations were necessary to address safety issues and bring the buildings up to modern standards.

President Donald Trump has been a vocal critic of the Federal Reserve and Powell, particularly over interest rate decisions. Trump has previously accused Powell of incompetence and suggested he could remove him from office. The president has also criticized the renovation project, likening it to the Palace of Versailles and alleging fiscal mismanagement.

In response to the DOJ's actions, Powell asserted that the legal threat is not about his testimony or congressional oversight but about whether the Federal Reserve can continue to set interest rates based on evidence and economic conditions, free from political pressure or intimidation. He stated, "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."

The DOJ has not provided immediate comments on the investigation. The situation has raised concerns about potential political interference in the Federal Reserve's decision-making process and its longstanding independence.