Powell Responds to Criminal Investigation Allegations: Claims the Investigation Is a "Political Threat" for His Refusal to Cut Rates

On January 12, the Office of the U.S. Attorney for the District of Columbia has launched a criminal investigation into Federal Reserve Chair Jerome Powell, focusing on the renovation project of the Federal Reserve headquarters and whether Powell provided false statements to Congress regarding the scale of the project.

This criminal investigation was approved by the head of the office, long-time ally of President Trump, Jeanine Pirro, in November last year. Currently, the prosecutors have contacted Powell’s office multiple times, requesting documents related to the renovation of the Federal Reserve building.

Although it is unclear whether Powell has been formally subpoenaed or a grand jury has been convened, the Department of Justice issued a subpoena to the Federal Reserve last Friday, indicating that criminal charges could be filed related to his testimony before Congress in June of last year.

In response to online public opinion, Powell issued a formal statement on the evening of the 11th. He stated, “I deeply respect the rule of law and accountability. No one is above the law.”

However, he also emphasized that while the charges appear to concern the renovation project, the real reason is that the Federal Reserve, under his leadership, did not lower interest rates according to President Trump’s wishes, but instead maintained independent professional judgment. Therefore, he views this investigation as a “political threat and pressure.”

This statement is seen as Powell’s public defense of the Federal Reserve’s independence, which has long been influenced by political pressure. Trump has repeatedly criticized Powell for refusing to significantly cut rates and has even threatened to dismiss him, as well as threatened to sue over the $2.5 billion Federal Reserve headquarters renovation project, calling Powell “incompetent.”

In his statement, Powell further clarified, “This is about whether the Federal Reserve can continue to set interest rates based on economic data or whether monetary policy will be subject to political intimidation.” He emphasized that he has maintained “impartiality” across multiple administrations and is committed to achieving price stability and maximum employment, and will continue to “act with integrity.”

In summary, while this incident appears to concern his personal legal standing, it actually points to the fundamental long-term conflict between U.S. politics and monetary policy. This issue is not only about interest rates but also about whether a modern economy can maintain rational governance and policy consistency.

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