Federal Reserve Chairman Jerome Powell launched a blistering public defense Sunday, accusing President Donald Trump of using a criminal perjury investigation as a political weapon to hijack the nation’s monetary policy.
In a video statement released Sunday night, Powell confirmed he is the subject of a probe but dismissed the allegations as a “pretext.” He argued the administration is attempting to “manipulate” the Federal Reserve because the central bank has refused to lower interest rates at the pace the President demands.
READ: Fed Chair Reveals DOJ Subpoenas, Threat Of Criminal Indictment In Historic Clash With White House
“This unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure,” Powell said. “This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings… Those are pretexts.”
The criminal referral originated in July from Rep. Anna Paulina Luna (R-FL), who asked the Justice Department to investigate Powell. Luna alleges the Fed Chair lied to the Senate Banking Committee regarding massive renovations to the Federal Reserve’s headquarters in Washington, D.C.
Powell, however, insists the timing is calculated.
“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,” Powell stated. He framed the conflict as a battle for the Fed’s independence, questioning whether future economic policy will be guided by evidence or directed by “political pressure or intimidation.”
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The dispute over the headquarters’ renovation costs spilled into public view on July 24 during a site tour. President Trump, accompanied by Sen. Tim Scott (R-SC), confronted Powell with documents suggesting the project’s price tag had surged from $2.7 billion to $3.1 billion—a roughly 25% overrun.
“It just came out,” Trump told Powell at the time, presenting a sheet of paper outlining the costs.
Powell appeared stunned during the exchange, putting on his glasses to read the document before responding, “I’m not aware of that, I have not heard that from anybody.” He later clarified that the higher figure included the “Martin renovation,” a separate project completed in 2021 that makes up a third of the complex.
The hostility between the White House and the Fed has simmered for months. Trump has frequently criticized the central bank’s resistance to aggressive rate cuts. Powell has also faced scrutiny for his economic forecasting; he famously predicted in August 2021 that rising inflation would be “transitory,” an assessment he later admitted underestimated the persistence of price hikes.
Powell’s term as Chairman is set to expire in May 2026, though his appointment as a governor extends through January 2028.
“No one—certainly not the chair of the Federal Reserve—is above the law,” Powell said Sunday. “But… this is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions.”
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