Jerome Powell under DOJ probe as Trump intensifies Fed conflict

Published: 12 January 2026. The English Chronicle Desk. The English Chronicle Online.

The Department of Justice has launched a criminal investigation into Jerome Powell, intensifying Donald Trump’s relentless campaign against the Federal Reserve. Powell confirmed that the DOJ served the Fed with grand jury subpoenas on Friday, potentially leading to a criminal indictment tied to his testimony before the Senate banking committee last June. The inquiry focuses on renovations to the Fed’s historic office buildings in Washington DC and whether Powell misled Congress about the project’s scope. The announcement marks a rare legal escalation targeting a sitting central bank chair.

Trump and his allies have for months accused the Federal Reserve of mismanaging multibillion-dollar projects, repeatedly threatening legal action if their demands were ignored. Jerome Powell insisted the threat of criminal charges stems from the Fed’s commitment to setting interest rates based on economic evidence rather than presidential preference. “This is about whether monetary policy will follow facts and economic conditions or political pressure,” he said in a statement on Sunday evening.

The US attorney’s office in the District of Columbia confirmed it is reviewing Jerome Powell’s public statements and Fed spending records, with approval from attorney Jeanine Pirro last November. The investigation also examines whether Powell’s actions could be construed as misleading Congress. Powell has chaired the Federal Reserve since 2018, initially appointed by Trump and later reappointed by Biden, and his term as chair ends in May.

Trump has criticized the Fed for refusing to implement rapid rate cuts, which he claims could have further stimulated the economy. His administration has already installed close allies on the Fed’s board of governors and targeted other officials for removal, including Lisa Cook, a Biden-appointed governor. Powell, however, maintained that he has consistently acted with integrity, serving under both Republican and Democratic administrations without fear or favour.

The Fed raised interest rates aggressively in 2022 and 2023 to combat historic inflation levels, bringing them to their highest point in two decades. While the central bank began easing rates last year, Trump publicly demanded faster cuts to boost economic growth, a move Powell and other officials resisted amid uncertain global trade and tariff policies.

Powell stressed the importance of central bank independence, warning that political interference could undermine both the US economy and public trust. “Public service requires standing firm against threats. I will continue fulfilling my responsibilities with integrity,” he said. Observers note that Trump’s ongoing campaign against the Fed could redefine the relationship between political leaders and monetary policymakers.

Legal analysts suggest the DOJ investigation, while unprecedented, highlights tensions between elected officials and independent institutions. Powell’s defense emphasizes adherence to legal standards and prioritizing long-term economic stability over short-term political objectives. Critics argue Trump’s pressure on the Fed is a continuation of his broader approach to influence federal agencies, creating unprecedented challenges for central bank independence.

The outcome of the investigation could shape future monetary policy in the United States, with implications for global markets. Powell’s decisions, particularly regarding interest rates and economic forecasting, remain under intense scrutiny. Meanwhile, the White House deferred comment to the Department of Justice, which has not yet responded to requests for clarification.

The Fed’s independence has been a cornerstone of US economic policy for decades. Trump’s direct attacks on Jerome Powell represent a historic moment, testing the resilience of institutional checks and balances. As inflation concerns persist and economic uncertainty continues, the DOJ investigation underscores the broader debate over the limits of executive influence on central banking.

Powell’s tenure reflects a balancing act between adhering to economic principles and responding to political pressures. The investigation and Trump’s campaign against the Fed illustrate the stakes involved when legal, political, and economic interests intersect at the highest level of US governance. With his term as chair ending soon, Powell’s role and the investigation’s findings will likely dominate discussions about the future of the Federal Reserve and its policy direction.

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