By Emmanuel Bobby
Federal Reserve Chair Jerome Powell said Sunday that the Justice Department subpoenaed the central bank on Friday and threatened a criminal indictment, calling it the latest escalation in what he described as a yearlong pressure campaign by the Trump administration.
According to Powell, the threatened indictment stems from his June testimony before the Senate regarding the renovation of Federal Reserve office buildings.
“No one — certainly not the chair of the Federal Reserve — is above the law,” Powell said. “But this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.”
Powell argued that the subpoenas are part of a broader effort to exert political influence over the Fed, particularly its independence in setting interest rates. He said the administration has repeatedly criticized the central bank as it pushed for lower borrowing costs amid an affordability crisis affecting consumers.
Since before the start of his second term, President Donald Trump has openly demanded rate cuts and frequently attacked Powell and other senior Fed officials. The Federal Reserve cut interest rates three times last year, but Trump has continued to argue that rates remain too high.
“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions,” Powell said, “or whether monetary policy will instead be directed by political pressure or intimidation.”
Powell dismissed the focus on his Senate testimony and the Fed’s headquarters renovation as “pretexts,” saying the threat of criminal charges is directly tied to the Fed’s refusal to align monetary policy with the president’s preferences.
“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,” Powell said, “rather than following the preferences of the president.”
Despite repeated calls from Trump for his removal, Powell said the latest developments would not prompt his resignation. He said he intends to “continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people.”
In a phone call with NBC News, Trump said he was unaware of any Justice Department probe and again criticized Powell.
“I don’t know anything about it, but he’s certainly not very good at the Fed, and he’s not very good at building buildings,” Trump said. When asked about Powell’s claim that the subpoenas were meant to pressure the Fed to cut rates, Trump responded, “No. I wouldn’t even think of doing it that way.”
“What should pressure him is the fact that rates are far too high,” Trump added. “That’s the only pressure he’s got.”
Senior White House officials have accused Powell of mismanaging a long-planned renovation of the Federal Reserve’s headquarters, alleging last summer that he misled Congress about the project. The renovation has faced cost overruns, prompting increased scrutiny.
The Federal Reserve said it asked its inspector general to review the expansion plans, a move Powell ordered following criticism from Trump. Powell has said the project’s plans evolved over time.
A Justice Department spokesperson declined to comment on any specific case, saying only that the attorney general has instructed U.S. attorneys to prioritize investigations into potential abuse of taxpayer funds.
Sen. Thom Tillis, R-N.C., said in a statement that the episode should erase any remaining doubt that advisers within the Trump administration are attempting to undermine the independence of the Federal Reserve. Tillis said he would oppose confirmation of any Trump nominee to the Fed “until this legal matter is fully resolved.”
Financial markets showed little immediate reaction to Powell’s remarks. In early evening trading, the U.S. dollar slipped about 0.3% against a basket of major currencies.
Trump has spent months attacking Powell, whom he originally appointed during his first term, accusing him of moving too slowly to cut interest rates. In a recent interview with The New York Times, Trump said he has already selected a successor to replace Powell when his term ends in May.
The Justice Department has also applied pressure to the central bank through an investigation into mortgage fraud allegations against Fed Governor Lisa Cook. Cook has repeatedly denied the claims, and her attorneys have said she “did not ever commit mortgage fraud.”
As a Federal Reserve governor, Cook holds a permanent vote on interest rate decisions.
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