Powell Rebukes DOJ Probe, Warns Against Politicizing the Fed — Earns Bipartisan Praise

Federal Reserve Chair Jerome Powell issued a firm public response after the Department of Justice served grand jury subpoenas tied to his Senate testimony about a multi-year Federal Reserve renovation project. The inquiry, opened by U.S. Attorney for the District of Columbia Jeanine Pirro, arrives amid sustained pressure from President Donald Trump to cut interest rates.

Powell posted a video statement addressing the subpoenas directly, calling the action unprecedented and arguing the investigation is a pretext that risks politicizing monetary policy. He framed the subpoenas as part of a broader effort to influence Fed decisions rather than a genuine oversight matter related to the renovation project.

“On Friday, the Department of Justice served the Federal Reserve with grand jury subpoenas, threatening a criminal indictment related to my testimony before the Senate Banking Committee last June. That testimony concerned in part a multi-year project to renovate historic Federal Reserve office buildings,” Powell said.

“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. But this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.”

“This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress’s oversight role; the Fed through testimony and other public disclosures made every effort to keep Congress informed about the renovation project. 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.”

“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.”

“I have served at the Federal Reserve under four administrations, Republicans and Democrats alike. In every case, I have carried out my duties without political fear or favor, focused solely on our mandate of price stability and maximum employment. 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 statement drew immediate attention and praise across the political spectrum. Former Fed Chair Janet Yellen described the inquiry as “extremely chilling,” warning that markets should be concerned by any move that appears to threaten central bank independence. Conservative columnist David French lauded Powell for showing “quiet dignity and real courage,” and political reporter John Bresnahan called the statement “extraordinary,” noting Powell effectively accused the administration of manufacturing a probe to influence interest-rate policy.

The episode highlights broader concerns among economists, former Fed officials, and market participants about the risk of politicizing monetary policy. Independence of the central bank is widely viewed as essential to credible, evidence-based decisions on interest rates and inflation. Powell pledged to continue carrying out the Fed’s mandate for price stability and maximum employment despite the legal and political pressures.

What’s next: The DOJ subpoenas and any subsequent legal actions are likely to draw further scrutiny from Capitol Hill, the financial community, and the media. Observers say the case will be watched closely for its implications for Fed independence and the separation between political influence and monetary policy decisions.