DOJ Initiates Criminal Investigation into Fed Chair Powell Over Renovation Testimony

Federal Reserve Chair Jerome Powell announced that the Department of Justice (DOJ) has initiated a criminal investigation into his testimony before the Senate Banking Committee regarding the Federal Reserve's building renovation project. In a video statement released Sunday night, Powell confirmed that the DOJ served the Federal Reserve with grand jury subpoenas on Friday, threatening a criminal indictment related to his June testimony about the multi-year renovation of the central bank's historic office buildings.

"This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress's oversight role; the Fed through testimony and other public disclosures made every effort to keep Congress informed about the renovation project. Those are pretexts. The threat of criminal charges 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 preferences of the President," Powell stated.

The renovation project, initially estimated at $1.9 billion, has faced scrutiny due to cost overruns, with current projections reaching $2.5 billion. The upgrades aim to modernize the Federal Reserve's headquarters by replacing outdated systems, addressing safety hazards, and enhancing security features. President Donald Trump has criticized the project, alleging mismanagement and excessive spending. During a visit to the Federal Reserve building in July, Trump claimed the renovation costs had escalated to $3.1 billion, a figure Powell disputed, clarifying that the correct amount is $2.5 billion and that Trump's figure included unrelated past projects.

In response to the DOJ's actions, Powell emphasized the importance of the Federal Reserve's independence in setting monetary policy based on economic conditions rather than political pressure. He affirmed his commitment to serving the American people with integrity and without political fear or favor.

The DOJ has not provided further details on the investigation. A spokesperson for Attorney General Pam Bondi stated, "The Attorney General has instructed her U.S. Attorneys to prioritize investigating any abuse of taxpayer dollars." The U.S. Attorney's Office in Washington, D.C., declined to comment on ongoing investigations.

This development has raised concerns about potential political interference in the Federal Reserve's operations, with critics warning that undermining the central bank's independence could destabilize financial markets and the broader economy.