Federal Reserve Chair Powell Faces Criminal Investigation Over Headquarters Renovation

The U.S. Department of Justice has launched a criminal investigation into Federal Reserve Chair Jerome Powell, focusing on his congressional testimony regarding the Federal Reserve's $2.5 billion headquarters renovation project. Powell announced that the central bank received grand jury subpoenas on January 10, 2026, related to this matter.

Powell characterized the investigation as a politically motivated attempt to influence the Federal Reserve's independent monetary policy decisions. He stated, "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."

The renovation project, which began in 2022 and is scheduled for completion in 2027, has faced cost overruns, increasing from an initial estimate of $1.9 billion to approximately $2.5 billion. The Federal Reserve attributes these overruns to factors such as inflation, rising labor and material costs, and unforeseen issues like asbestos removal and soil contamination.

President Donald Trump has previously criticized Powell for not lowering interest rates as desired and has now expressed concerns over the renovation's escalating costs. The Justice Department's investigation is seen by some as an escalation in the ongoing tensions between the administration and the Federal Reserve.

In response to the investigation, central bank leaders from nine major economies, including European Central Bank President Christine Lagarde and Bank of England Governor Andrew Bailey, issued a joint statement expressing strong support for Powell and emphasizing the importance of central bank independence for economic stability. They warned that political interference could undermine the Fed's credibility and lead to increased borrowing costs for the U.S. due to shaken investor confidence.

As of January 13, 2026, the investigation is ongoing, and no criminal charges have been filed against Powell.