Jerome Powell under criminal scrutiny as Trump–Fed power struggle intensifies
Jerome Powell. AI-generated image for illustration
Federal prosecutors have opened a criminal investigation into Federal Reserve Chair Jerome Powell, a move that has sent shockwaves through Washington, global financial markets, and the US central banking system. The probe, disclosed by Powell himself on Sunday, is being widely described as unprecedented and has intensified fears that political pressure is being used to challenge the independence of the Federal Reserve.
Powell revealed that the US Justice Department issued subpoenas and raised the possibility of a criminal indictment related to testimony he gave to a Senate committee concerning renovations to Federal Reserve buildings. The development comes amid long-running public clashes between Powell and President Donald Trump, who has repeatedly criticised the Fed chair for refusing to cut interest rates more aggressively.
What the Criminal Probe Into Jerome Powell Is About
According to Powell, the investigation centers on statements he made before Congress about Federal Reserve building renovations, an issue that has drawn criticism from the Trump administration. Powell said prosecutors questioned whether his testimony was accurate, a claim he strongly disputes.
Calling the investigation “unprecedented,” Powell suggested it was politically motivated rather than rooted in genuine legal concerns.
“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions, or whether monetary policy will be directed by political pressure or intimidation,” Powell said.
The Justice Department has not publicly confirmed the probe, and the White House declined to comment. The BBC said it contacted both agencies for clarification.
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Trump’s Longstanding Clash With the Federal Reserve
President Trump, who nominated Powell as Fed chair in 2017, has spent years attacking him for not cutting interest rates quickly enough. Although the Federal Reserve cut rates three times in the second half of 2025, Trump has continued to argue that rates should be lower to stimulate economic growth.
In an interview with NBC News, Trump denied having knowledge of the investigation but again criticised Powell.
“He’s certainly not very good at the Fed, and he’s not very good at building buildings,” Trump said.
Critics argue that Trump’s repeated public pressure on Powell risks undermining the Fed’s independence, a cornerstone of US economic credibility.
Political Backlash and Fears Over Fed Independence
Lawmakers from both parties reacted sharply to news of the probe. Republican Senator Thom Tillis, a member of the Senate Banking Committee, said he would block confirmation of any Fed nominees until the matter is resolved.
“If there were any remaining doubt that advisers within the Trump administration are pushing to end the independence of the Federal Reserve, there should now be none,” Tillis said.
Democratic Senator Elizabeth Warren went further, accusing Trump of attempting to force Powell out and replace him with a loyalist.
“This is about installing a sock puppet to complete a corrupt takeover of America’s central bank,” Warren said.
Market Reaction: Gold and Silver Surge
The news triggered an immediate reaction in financial markets. Investors moved toward safe-haven assets, sending gold prices up 1.4% to $4,572.36 an ounce, after briefly hitting a record high of $4,600.33. Silver also surged to a record $84.58 an ounce before easing slightly.
Analysts said the probe, combined with geopolitical unrest in Iran, fueled uncertainty about US economic governance.
Why This Case Is So Unusual
Legal experts note that criminal charges related to congressional testimony are notoriously difficult to prove. Powell emphasized that he respects accountability and the rule of law but warned that the investigation should be viewed in the broader context of political pressure on the Fed.
Recent attempts by the Trump administration to pursue criminal cases against political adversaries, including former FBI Director James Comey and New York Attorney General Letitia James, were dismissed by courts, adding to concerns about selective enforcement.
What Happens Next
The probe is reportedly being overseen by the US Attorney’s Office for the District of Columbia, according to the New York Times. Powell remains in office, but the investigation has intensified debates over whether the Federal Reserve can continue operating free from political influence.
For now, markets, lawmakers, and global investors are watching closely, not just for legal outcomes, but for what this confrontation means for the future of US monetary policy.
FAQ
Is Jerome Powell under criminal investigation?
Yes. Jerome Powell confirmed that federal prosecutors have opened a criminal investigation related to testimony he gave to the Senate about Federal Reserve building renovations.
What is Jerome Powell accused of?
The probe reportedly focuses on whether Powell provided inaccurate testimony to Congress. No formal charges have been announced.
Has the Justice Department confirmed the investigation?
No. The Justice Department has not publicly confirmed the probe, though Powell says subpoenas were issued.
Is this investigation politically motivated?
Powell and several lawmakers believe the timing and context suggest political pressure linked to his refusal to cut interest rates as demanded by President Trump.
Can Trump fire Jerome Powell?
The president cannot easily remove the Fed chair without cause. Any attempt to do so could face serious legal challenges.
Why does Fed independence matter?
An independent Federal Reserve is considered essential to controlling inflation, managing economic stability, and maintaining global confidence in the US financial system.
How have markets reacted to the news?
Gold and silver prices surged as investors sought safe assets amid fears of political interference in monetary policy.
What happens if Powell is charged?
Any indictment would likely trigger a constitutional and economic crisis, testing long-standing protections around the Federal Reserve’s independence.