Federal Reserve Chair Jerome Powell on Sunday acknowledged the Justice Department has subpoenaed the central bank, setting up a potential criminal indictment over testimony Powell gave to the Senate Banking Committee in June.
But in a video statement posted to the Fed’s website, Powell called the DOJ’s reasoning — which also cites an over-budget renovation of two central bank buildings — “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,” Powell said in his statement.
The Federal Open Market Committee, upon which Powell sits, has voted to lower interest rates at each of its last three meetings — in September, October and December. But President Donald Trump had publicly lobbied for months for central bankers — and Powell, in particular — to lower them earlier.
“Jerome ‘Too Late’ Powell has done it again!!!” Trump wrote on Truth Social after the FOMC kept rates steady in late July. “He is TOO LATE, and actually, TOO ANGRY, TOO STUPID, & TOO POLITICAL, to have the job of Fed Chair. … Put another way, ‘Too Late’ is a TOTAL LOSER, and our Country is paying the price!”
Trump waged a pressure campaign against Powell throughout much of the past year, regularly threatening to fire him before walking back such comments. The Supreme Court in May exempted Fed officials from Trump’s firing power.
But the power struggle has continued.
“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,” Powell said Sunday in his statement. “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.”
Powell’s term as Fed chair will expire in May, but Trump has said he’s already chosen a successor — though he hasn’t made it public.
In an NBC News interview Sunday, Trump said the Fed subpoenas were not meant to pressure Powell on interest rates.
“I wouldn't even think of doing it that way," Trump said. "What should pressure him is the fact that rates are far too high.”
At the time of the interview, Trump said he didn’t “know anything about” the subpoenas, “but [Powell is] certainly not very good at the Fed, and he's not very good at building buildings.”
Thirteen ex-Fed and Treasury officials appeared unconvinced. In a joint statement Monday, former Fed chairs Janet Yellen, Ben Bernanke and Alan Greenspan, among others, called the subpoenas an “unprecedented attempt to use prosecutorial attacks to undermine that independence.”
“This is how monetary policy is made in emerging markets with weak institutions, with highly negative consequences for inflation and the functioning of their economies more broadly,” they wrote. “It has no place in the United States whose greatest strength is the rule of law, which is at the foundation of our economic success.”
Several lawmakers weighed in on Sunday’s announcement — and the commentary did not fall cleanly along party lines.
Republican Sen. Lisa Murkowski of Alaska said she spoke with Powell on Monday and concluded it’s “clear the administration’s investigation is nothing more than an attempt at coercion.”
“If the Department of Justice believes an investigation into Chair Powell is warranted based on project cost overruns — which are not unusual — then Congress needs to investigate the Department of Justice,” Murkowski wrote Monday on X. “The stakes are too high to look the other way.”
Sen. Thom Tillis, R-NC, said in a Sunday social post that he would “oppose the confirmation of any nominee for the Fed — including the upcoming Fed Chair vacancy — until this legal matter is fully resolved.”
“If there were any remaining doubt whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none,” Tillis wrote. “It is now the independence and credibility of the Department of Justice that are in question.”
Sen. Elizabeth Warren, D-MA, in a Sunday social post, backed the notion that the Senate “must not move ANY Trump Fed nominee.”
“Trump wants to nominate a new Fed Chair AND push Powell off the Board for good to complete his corrupt takeover of our central bank,” wrote Warren, frequently a Powell critic. “[Trump] is abusing the law like a wannabe dictator so the Fed serves him and his billionaire friends.”
Senate Minority Leader Chuck Schumer, D-NY, said in a Sunday post on X that “this … kind of bullying” from Trump is expected.
“Anyone who is independent and doesn’t just fall in line behind Trump gets investigated,” Schumer wrote. “Jay Powell and the Fed aren’t the reason Trump’s economy and his poll numbers are in the toilet. If he’s looking for the person who caused that he should look in the mirror.”
However, Rep. Anna Paulina Luna, R-FL, cheered the investigation in a Sunday post. Luna wrote Attorney General Pam Bondi in July, asking the DOJ to investigate and accusing Powell of lying twice in his testimony.
“It’s good to see my criminal referral working in real time,” Luna wrote on X. “You CANNOT lie to Congress. That is called PERJURY.”
Yellen, in a CNBC interview, pushed back on the notion that her successor atop the Fed would lie on the matter, calling the probe “extremely chilling.”
“Knowing Powell as well as I do, the odds that he would have lied are zero so I do believe they’re going after him because they want his seat and want him gone,” she said.
Both Luna and Powell nodded Sunday to the concept that “no one” is above the law.
“I have deep respect for the rule of law and for accountability in our democracy,” Powell said Sunday. “But this unprecedented action should be seen in the broader context of the administration's threats and ongoing pressure.”
Powell is not the first Fed-connected individual to accuse Trump of using a federal investigation to try to tip the scales on another matter.
When Trump attempted to fire Powell’s Fed colleague Lisa Cook over alleged mortgage fraud, her lawyers wrote: “Even if the President had been more careful in obscuring his real justification for targeting Governor Cook, the President’s concocted basis for removal — the unsubstantiated and unproven allegation that Governor Cook ‘potentially’ erred in filling out a mortgage form prior to her Senate confirmation — does not amount to ‘cause’ within the meaning of the [Federal Reserve Act] and is unsupported by caselaw.”
The Supreme Court is set to hear oral arguments in the Cook case Jan. 21.
