Powell links DOJ probe to dispute over US interest rate policy

Federal Reserve Chair Jerome Powell said a criminal probe by federal prosecutors is linked to disagreements over interest rate policy rather than renovation issues.

Powell confirmed the US Department of Justice issued subpoenas tied to his Senate testimony on the Federal Reserve’s Washington headquarters renovation.

He described the investigation as “unprecedented” and framed it as part of sustained political pressure on the central bank.

The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on evidence and economic conditions rather than presidential preferences.

Powell said.

Powell added that the case raises questions about whether monetary policy can remain independent of political intimidation.

The Federal Reserve cut interest rates three times in the second half of 2025 and ended quantitative tightening in December.

President Donald Trump denied knowledge of the probe and rejected claims of political motivation.

I don’t know anything about it, but he’s certainly not very good at the Fed.

Trump said.

Trump also said pressure on Powell should come only from economic conditions and interest rate levels.

With Powell’s term ending in May 2026, Trump is reportedly considering several candidates to lead the Federal Reserve.