Federal Reserve Chair Jerome Powell has said that the Trump administration threatened him with a criminal indictment. The warning is linked to testimony he gave before Congress last summer. Powell said the move was a political attempt to pressure the Federal Reserve and influence monetary policy decisions.
Powell disclosed the development in a public statement released Sunday night. He said the Department of Justice served the Federal Reserve with grand jury subpoenas on Friday. The subpoenas referenced his testimony before the Senate Banking Committee in June. The testimony focused on a renovation project involving Federal Reserve buildings.
Powell said he respects the rule of law and accountability in a democracy. He added that no official is above the law. However, he described the threatened indictment as unprecedented. He warned that the action could damage trust in independent institutions.
Powell Says Charges Are a Pretext to Control Fed Policy
Powell said the threatened criminal charges were not about his testimony. He also said they were not about the renovation project. According to him, those explanations were pretexts. He said the real issue was the Federal Reserve’s refusal to follow political pressure.
Powell stated that the administration has repeatedly pushed for lower interest rates. He said the pressure intensified after Trump returned to office in January. Powell said the Fed sets rates based on economic data. He added that decisions are made to serve the public interest.
He said the threat of prosecution was a response to the Fed’s independence. Powell warned that such actions could undermine democratic norms. He stressed that central bank independence is essential for stable economic policy. He said political interference risks long-term economic damage.
Political Fallout Raises Questions About Justice Department Independence
The revelation triggered immediate political reaction. Republican Senator Thom Tillis responded with a public statement. Tillis is a member of the Senate Banking Committee. The committee oversees Federal Reserve nominations. Tillis said the threatened indictment calls the Justice Department’s independence into question.
Tillis said he would oppose any Trump nominees to the Federal Reserve. This includes the president’s expected choice for the next Fed chair. He said he would maintain his opposition until the legal matter is resolved. His comments added pressure on the administration.
President Trump denied any knowledge of the Justice Department’s actions. He made the comments during an interview with NBC News. Trump criticized Powell’s performance at the Federal Reserve. He also criticized the handling of building renovations. However, he said he was unaware of any indictment threat.
A Justice Department spokesperson declined to comment on the case. The spokesperson said the Attorney General had instructed U.S. attorneys to prioritize investigations involving misuse of taxpayer funds.
Experts Warn of a Threat to Central Bank Independence
Trump has publicly demanded sharp interest rate cuts since resuming office. He has blamed the Federal Reserve for slowing economic growth. He has also discussed firing Powell despite legal protections. Trump is also seeking to remove Fed Governor Lisa Cook. That case is currently before the Supreme Court.
Economists say central bank independence is critical. It protects monetary policy from short-term politics. It allows officials to focus on inflation control and long-term stability. Experts warn that political pressure could weaken financial confidence.
Peter Conti-Brown, a Fed historian at the University of Pennsylvania, called the inquiry a low point. He said Congress designed the Fed to resist presidential pressure. He warned that using criminal law against the Fed chair sets a dangerous precedent.
