#PowellUnderCriminalInvestigation

Federal Reserve Chair Jerome Powell has confirmed that he is currently under criminal investigation by the U.S. Department of Justice (DOJ) — a situation that has sent shockwaves through American politics, global markets, and conversations about central bank independence.

🧾 1. What Triggered the Investigation
The DOJ served grand jury subpoenas to the Federal Reserve related to Powell’s testimony before the U.S. Senate Banking Committee last June about the renovation of the Federal Reserve’s headquarters — a project that has ballooned to an estimated $2.5 billion.

Prosecutors are examining whether Powell misled Congress in that testimony, which is the basis for the criminal probe.

💬 2. Powell’s Public Response
Powell released a video statement strongly denying that the investigation is genuinely about the renovation or oversight. He said:
The DOJ’s action is **“unprecedented.””
The subpoenas should be seen in the broader context of political pressure from the Trump administration.
The criminal threat is essentially a consequence of the Federal Reserve setting interest rates based on economic data instead of political preference.
He emphasized that no one — including the Fed’s chair — is above the law, but claimed the probe is being used to intimidate the central bank.

Powell said the real issue is whether the Fed will maintain its independence to make monetary policy or be influenced by politics.

🏛️ 3. The Political Backdrop
This conflict doesn’t exist in a vacuum — it comes amid ongoing clashes between Powell and President Donald Trump. Trump has repeatedly criticized Powell for not cutting interest rates fast enough or deeply enough, and has openly said he wants lower rates.

Trump has denied involvement in directing the DOJ to open the investigation, saying “I don’t know anything about it,” but people debate how much influence the administration has had.

🤝 4. Bipartisan Backlash and Support
The probe has drawn strong reactions from both sides of the U.S. political spectrum:
Economists, former Fed chairs, and lawmakers have criticized the investigation as an attack on the independence of the Federal Reserve, warning that central bank autonomy is crucial for stable monetary policy.

Republican Senator Thom Tillis said he will block confirmation of any new Fed nominees until the matter is resolved.

Some corners of the White House and Trump allies have defended the probe and said scrutiny of costly government projects is legitimate, even if politically sensitive.

📉 5. Market Impact and Economic Concerns
Financial markets have reacted with caution to the situation:
The U.S. dollar weakened as investors worry about monetary policy uncertainty.
Gold prices surged as a “safe-haven” asset.
U.S. stock indexes showed volatility as traders weigh the implications of political interference with the Federal Reserve.

Economists warn that perceptions of political interference could hurt confidence in U.S. economic governance and possibly lead to higher inflation or weaker long-term growth.

🧠 6. Why Fed Independence Matters
Central bank independence is critical because it allows economic decisions — like setting interest rates — to be made based on data and long-term economic stability, not short-term political goals.
When politicians influence monetary policy too much, it can lead to higher inflation, economic instability, and loss of global confidence in the currency.

📌 SUMMARY – In Simple Terms
✔ A criminal investigation has started against Powell related to his testimony about the Fed’s building renovation.
✔ Powell says the investigation is truly about political pressure and attack on Fed independence.
✔ The dispute reflects tensions between Powell and Trump over interest rate policy.
✔ Lawmakers, economists, and markets are reacting strongly because Fed independence is foundational to the U.S. economy.
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