The Fed chairman directly accuses the Trump administration of using criminal investigations to pressure him
In what represents an unprecedented escalation in the relationship between the White House and the Federal Reserve, the chairman of the U.S. central bank, Jerome Powell, revealed that the Justice Department has issued grand jury subpoenas against the institution, even raising the possibility of criminal charges.
According to Powell, this legal offensive is direct retaliation for his refusal to comply with the demands of the Trump administration. "The threat of criminal prosecution is a consequence of the fact that the Fed's decisions are based on the public interest and economic judgment, not on the president's preferences," he stated gravely.
The heart of the legal dispute dates back to June 2025, during Powell's testimony before the Senate Banking Committee. At that time, the Fed chairman denied reports alleging irregularities in the costly renovation of the agency's headquarters in Washington, D.C., a project whose budget has ballooned to $2.5 billion.
A war declared
Powell has called the accusations "inaccurate," denying the existence of extravagant luxuries such as private elevators or rooftop gardens—elements that have served as ammunition for his detractors. However, for some analysts, the building is merely the stage for a much deeper battle: control over the price of money (interest rates).
The White House's response was swift, though it maintains a calculated distance from the legal action. In an interview with NBC News on Sunday, President Trump claimed to "know nothing" about the subpoenas, though he didn't miss the opportunity to question Powell's competence. "He hasn't done a good job at the Federal Reserve or in the construction of the building," the president declared.
This friction has set off alarm bells in the financial markets. Krishna Guha, director of central bank strategy at Evercore ISI, describes the situation as a "virtually declared war" between the executive branch and the central bank. "The level of this response will determine market confidence in the Federal Reserve's autonomy," Guha warned.
The impact of the news was immediate. US stock futures experienced significant declines after news broke of Powell's potential legal vulnerability, reflecting investor fears of a possible politicization of monetary policy.
While there is a history of tensions between Fed chairs and directors, the opening of a criminal investigation for management discrepancies marks uncharted territory in modern US history. What is at stake in the coming days is not only Jerome Powell's professional future, but also the credibility of the institution that safeguards the value of the dollar globally.
