Fed Chair Powell Addresses DOJ Investigation into Rate Policy and Independence

Source: CryptoTale Original Title: Fed Chair Powell Responds to DOJ Criminal Investigation Original Link:

DOJ Subpoenas and the Renovation Focus

Federal Reserve Chair Jerome Powell addressed a criminal investigation after federal prosecutors issued grand jury subpoenas to the central bank. The probe focuses on a $2.5 billion renovation of historic Fed buildings and Powell’s Senate testimony from June. Powell warned that the dispute centers on interest rate independence.

Powell said the Department of Justice served subpoenas related to his testimony before the Senate Banking Committee regarding a multiyear renovation of Federal Reserve headquarters buildings. The project carries an estimated cost of $2.5 billion. Powell stated the investigation does not center on renovation disclosures or congressional oversight, as the Fed provided testimony and public updates to Congress. However, he described the renovation issue as a pretext for the probe.

Powell delivered his remarks in a recorded statement, noting that no official stands above the law but describing the subpoenas as unprecedented. Federal prosecutors are examining whether Powell’s Senate testimony created legal exposure, with the investigation overseen by the U.S. Attorney’s Office for the District of Columbia.

Powell Cites Rate Policy Tensions With White House

Powell linked the investigation to disputes over monetary policy, stating that criminal charges followed the Fed’s refusal to cut interest rates quickly. He emphasized that the Fed sets rates based on evidence and economic conditions, and political pressure should not direct monetary policy decisions. He warned the investigation could affect the Fed’s future independence.

Powell noted his service under multiple administrations and said he carried out his duties without political favor. He stressed that public service sometimes requires standing firm under pressure. The investigation adds to concerns about the Federal Reserve’s institutional independence and the politicization of prosecutorial decisions.

Political Reaction

The Justice Department issued a brief statement saying the Attorney General instructed prosecutors to prioritize investigations involving taxpayer dollars. North Carolina Senator Thom Tillis expressed concern about the investigation’s implications and said he would oppose future Fed nominees until the legal matter concludes.

Powell confirmed he plans to continue serving as Fed chair and will carry out the role as confirmed by the Senate. He emphasized that decisions should follow data rather than political intimidation. The Justice Department probe remains ongoing under the U.S. Attorney’s Office in Washington.