Federal prosecutors have opened a criminal investigation into Federal Reserve Chair Jerome Powell, examining the $2.5 billion renovation of the Federal Reserve’s headquarters in Washington, D.C., and whether Powell misled Congress about key aspects of the project.
The U.S. Attorney’s Office for the District of Columbia authorized the investigation in November, according to reporting by The New York Times. The inquiry includes a review of Powell’s public statements and an examination of spending records related to the renovation:
The investigation escalates Mr. Trump’s long-running feud with Mr. Powell, whom the president has continually attacked for resisting his demands to slash interest rates significantly. The president has threatened to fire the Fed chair — even though he nominated Mr. Powell for the position in 2017 — and raised the prospect of a lawsuit against him related to the $2.5 billion renovation, citing “incompetence.”
Mr. Trump told The New York Times in an interview last week that he had decided on who he wants to replace Mr. Powell as Fed chair. He is expected to soon announce his decision. Kevin A. Hassett, Mr. Trump’s top economic adviser, is a front-runner for the top job. While Mr. Powell’s term as chair ends in May, his term as a governor runs through January 2028. Mr. Powell has not disclosed whether he plans to stay on at the central bank beyond this year.
In a rare video message released by the Fed on Sunday, Mr. Powell described the investigation as “unprecedented” and questioned the motivation for the move, even as he affirmed that he carried out his duties as chair “without political fear or favor.”
“This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings,” he said. “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.”
He warned that the inquiry reflects a broader struggle over the Federal Reserve’s independence, arguing that the prospect of criminal charges arises from the central bank making interest-rate decisions based on its assessment of what best serves the public rather than aligning with a president’s wishes.
Powell said the central issue is whether the Fed can continue to set monetary policy based on economic data and conditions, or whether those decisions will be shaped by political pressure and intimidation.
Investigators are reviewing Powell’s statements to Congress and financial records tied to the renovation, which includes the historic Marriner S. Eccles Building and another Federal Reserve property. The project’s cost has increased significantly from earlier estimates to roughly $2.5 billion.
The Justice Department issued grand jury subpoenas on Friday, which Powell confirmed.
Critics, including some Republican lawmakers, have accused Powell of downplaying the scope, cost, and luxury features of the renovation. Powell has denied wrongdoing.
A spokesperson for Attorney General Pam Bondi declined to comment on the investigation but said Bondi has directed U.S. attorneys to prioritize investigations into alleged abuses of taxpayer funds.
This is a breaking news story. Please check back for updates.
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The lede headline for this story “Breaking: Authorities Open Investigation Into Top Trump Official” is inappropriate. The Federal Reserve was established as an “independent” entity. Jerome Powell is in no way a “Top Trump Official”.