The U.S. attorney’s office in Washington, D.C., has started a criminal investigation into Federal Reserve Chair Jerome Powell related to the central bank’s headquarters renovation. This move is an unprecedented escalation in President Donald Trump’s feud with Powell and will set off a firestorm with lawmakers who will inquire about political influence on monetary policy.
On Sunday night, Powell announced that the Justice Department issued grand jury subpoenas to the Federal Reserve on Friday. He stated that these subpoenas “threaten” a criminal charge linked to his testimony in June before the Senate Banking Committee regarding the renovation of historic Fed office buildings.
Reuters reported that the investigation focuses on Powell’s statements to Congress and on spending records connected to the renovation project.
The renovation has faced ongoing criticism from the Trump administration, including from Office of Management and Budget Director Russell Vought, who argued that the project does not meet federal planning and oversight standards.
Video message from Federal Reserve Chair Jerome H. Powell: https://t.co/5dfrkByGyX pic.twitter.com/O4ecNaYaGH
— Federal Reserve (@federalreserve) January 12, 2026
In a statement from the Federal Reserve, Powell said the subpoena threat was “not about Congress’ oversight role.” He mentioned that the Fed “made every effort to keep Congress informed” about the project through testimony and other public disclosures. Powell described the renovation issue as a pretext and claimed that the threat of charges came after the Fed set interest rates “based on our best assessment of what will serve the public, rather than following the preferences of the president.”
Senator Thom Tillis, a North Carolina Republican on the Senate Banking Committee, stated that he would oppose any Trump nominees to the Federal Reserve until the issue is resolved. “I will oppose the confirmation of any nominee for the Fed, including the upcoming Fed chair vacancy, until this legal matter is fully resolved,” he said in a statement.
Senator Elizabeth Warren, a Massachusetts Democrat, called the investigation an effort to sway the Fed to meet Trump’s demands. “The Senate must not move ANY Trump Fed nominee,” she wrote on social media.
This investigation comes as Trump is preparing to name Powell’s successor when his term as chair ends in May 2026. Powell’s separate term as a Fed governor extends longer, which could allow him to stay on the board even after stepping down as chair.
Trump, who appointed Powell to lead the Fed in 2017, has repeatedly criticized him regarding interest rates and the speed of rate cuts. The Fed lowered rates three times in late 2025, and markets are watching to see if the central bank maintains its position at its next meeting later this month.
In comments reported by Reuters, Trump claimed he knew nothing about the Justice Department’s probe into Powell, but he did criticize his performance, stating Powell is “certainly not very good at the Fed” and “not very good at building buildings,” while arguing that rates are “far too high.”
The Justice Department chose not to provide detailed comments, and the Federal Reserve said it had nothing more to add beyond Powell’s statement. Powell is set to step down from the Fed chair post in May, however, due to his separate, 14-year term as a governor, he could continue to serve on the central bank board following this departure.
