What to know about the DOJ's criminal probe into Fed Chair Powell
Powell rebuked the probe as an effort to undermine the Fed's independence.
A criminal investigation of Federal Reserve Chair Jerome Powell has ratcheted up an extraordinary clash between the White House and the nation’s top central banker.
The probe appears to center on Powell’s testimony to Congress last year about cost overruns in a multi-billion-dollar office renovation project. Powell, who was appointed by Trump in 2017, issued a rare video message on Sunday night rebuking the investigation as a politically motivated effort to influence the Fed's interest rate policy.
The investigation follows months of strident criticism leveled at the Fed by President Donald Trump, who has urged the central bank to significantly reduce interest rates. Trump denied any involvement in the criminal investigation during a brief interview with NBC News on Sunday night.
Here’s what to know about the investigation of Powell.
What are the allegations in the DOJ’s criminal probe against Powell?
The investigation appears to focus on allegations of false remarks made by Powell about a renovation of the Fed's headquarters during a congressional hearing in June.
A 2021 proposal of the Fed’s renovation plans included features such as a rooftop terrace and water fountains, as well as private elevators and dining rooms for some top staff.
Speaking under oath to members of Congress in June, Powell said some of those amenities were no longer part of the Fed’s latest plans.
“There’s no V.I.P. dining room; there’s no new marble,” Powell said. “We took down the old marble, we’re putting it back up. We’ll have to use new marble where some of the old marble broke. But there’s no special elevators. There’s just old elevators that have been there.”
Powell added that plans had changed over the course of the project.
In July, Trump visited the Federal Reserve building, repeating calls for lower interest rates while standing alongside Powell. Donning matching white hard hats, Trump and Powell took a tour of the central bank's $2.5 billion building renovation project.
Later that month, House Republican Rep. Anna Paulina Luna of Florida initially sent the DOJ a criminal referral against Powell over his testimony to the Senate Banking Committee.
Luna accused Powell at the time of making false statements to the committee about the central bank's renovation at its headquarters.
Trump has repeatedly denounced Powell for alleged overspending tied to the central bank's renovation. The Fed attributes spending overruns to unforeseen cost increases, saying that its building renovation will ultimately "reduce costs over time by allowing the Board to consolidate most of its operations," according to the central bank's website.
Speaking to NBC News late Sunday, Trump said he did not have knowledge of the investigation into Powell.
"I don’t know anything about it, but he’s certainly not very good at the Fed, and he’s not very good at building buildings,” Trump said.
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The president brought up interest rates, saying, "What should pressure him is the fact that rates are far too high. That’s the only pressure he’s got,” Trump said, according to NBC News. “He’s hurt a lot of people,” he added. “I think the public is pressuring him.”
On Monday, White House press secretary Karoline Leavitt said Trump has "every right to criticize Powell" while affirming Trump's support for the independence of the Fed.
When asked whether Trump supports the political independence of the central bank, Leavitt said, "He has said that many times."
In a statement to ABC News, a spokesperson for Attorney General Pam Bondi said, "The Attorney General has instructed her U.S. Attorneys to prioritize investigating any abuse of taxpayer dollars."
Tim Lauer, a spokesman for D.C. U.S. Attorney Jeanine Pirro, told ABC News in a statement, “We do not comment on ongoing investigations.”
What has Powell said about the probe?
In a video message on Sunday, Powell said the allegations against him amount to "pretexts" invoked in service of the Trump administration's push for lower interest rates.
"No one -- certainly not the chair of the Federal Reserve -- is above the law," Powell said. "But this unprecedented action should be seen in the broader context of the administration's threats and ongoing pressure."
He added, “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.”
A bipartisan group of economists and former top Fed officials on Monday issued a joint statement condemning the probe as an attempt to undermine the Fed’s political independence.
“The reported criminal inquiry into Federal Reserve Chair Jay Powell is an unprecedented attempt to use prosecutorial attacks to undermine that independence,” the statement said.
The signatories included former Fed Chairs Alan Greenspan, Ben Bernanke and Janet Yellen, who led the central bank for a combined period of roughly three decades, spanning multiple presidents from both major parties.
The Fed is an independent agency established by Congress. Federal law allows the president to remove the Fed chair for "cause" -- though no precedent exists for such an ouster. Powell's term as chair is set to expire in May, but he can remain on the Fed's policymaking board until 2028. Powell has not indicated whether he intends to remain on the board.
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