Federal Reserve Chair Jerome Powell announced Sunday evening that the Department of Justice has served the central bank with grand jury subpoenas and threatened a criminal indictment, marking a historic and volatile escalation in the rift between the White House and the Fed.
Powell, appearing in a video statement, disclosed that the subpoenas were served on Friday. While the legal action officially targets his June testimony regarding a $2.5 billion renovation of the Fed’s historic office buildings, the Chair flatly rejected the idea that the investigation is about construction costs or congressional oversight.
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Instead, Powell described the potential indictment as a weaponized response to the central bank’s refusal to lower interest rates on the President’s timeline.
“This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings,” Powell said. “Those are pretexts. 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.”
The conflict stems from President Donald Trump’s repeated criticism of the Fed, an independent agency he has blasted for keeping borrowing costs higher than he prefers. The building renovation project became a flashpoint this summer when Trump criticized the expense as excessive.
Powell acknowledged the severity of the legal threat but framed it as a battle for the soul of the American financial system.
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“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation,” he said.
Defending his record, Powell noted that he has served under four administrations, both Republican and Democratic, and has always prioritized the Fed’s dual mandate of price stability and maximum employment over political expediency.
“I have deep respect for the rule of law and for accountability in our democracy. No one—certainly not the chair of the Federal Reserve—is above the law,” Powell stated. “But this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.”
He concluded with a vow to remain in his post: “Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people.”
The Department of Justice released a brief statement to the Associated Press, saying they “cannot comment on any particular case.” The department pointed to a directive from Attorney General Pam Bondi, stating she “has instructed her US Attorneys to prioritize investigating any abuse of taxpayer dollars.”
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