PRINCIPLE

January 12, 2026

DOJ launches criminal probe of Fed Chair Jerome Powell

Criminal probe threatens Fed independence amid Trump rate-cut pressure

Federal prosecutors opened a criminal investigation into Federal Reserve Chair Jerome Powell on January 11, 2026, concerning the Fed's $2.5 billion headquarters renovation and his June 2025 Congressional testimony about it. The Justice Department served grand jury subpoenas on the Fed on Friday, January 10, threatening criminal indictment. Powell stated the investigation is part of a yearlong Trump administration pressure campaign to influence Federal Reserve interest rate decisions. The probe was approved in November 2025 by U.S. Attorney for D.C. Jeanine Pirro. Trump denied directing the investigation, though his team was reportedly weighing a "gross incompetence lawsuit" against Powell as of December 29, 2025. Powell's term as Fed chair expires in May 2026. The investigation sparked bipartisan backlash from economists and lawmakers concerned about threats to Federal Reserve independence. The U.S. Attorney's Office for D.C. didn't contact the White House or main Justice Department before issuing subpoenas, according to three sources.

Federal prosecutors opened a criminal investigation into Federal Reserve Chair Jerome Powell, which he confirmed in a statement on Sunday, January 11, 2026. The Department of Justice served the Federal Reserve with grand jury subpoenas on Friday, January 10, 2026, threatening criminal indictment over Powell's testimony regarding the Fed's headquarters renovation.

The investigation focuses on Powell's oversight of the Federal Reserve's $2.5 billion headquarters renovation project and whether he lied to Congress about the cost and scope of the project, which exceeded its original budget. Powell testified before the Senate in June 2025 about the multi-year renovation addressing alleged cost overruns.

Powell characterized the investigation as a "pretext" masking the Trump administration's real motive: pressuring the Federal Reserve to lower interest rates more aggressively. Powell stated this represents an unprecedented escalation and is part of a yearlong hostile push by the administration to influence the central bank's monetary policy decisions.

U.S. Attorney for the District of Columbia Jeanine Pirro approved the criminal investigation in November 2025. Pirro defended the probe amid bipartisan backlash, stating it addresses serious allegations about grand jury subpoenas related to Federal Reserve building renovations and cost management.

President Trump denied directing the investigation on January 11, 2026, stating he knew nothing about it. However, Trump has a documented history of attacking Powell over interest rate policies and expressing desire to remove him. Trump's team was reportedly weighing a "gross incompetence lawsuit" against Powell as of December 29, 2025.

If convicted of a crime, Powell could be removed from his position "for cause" by the President—a power that typically cannot be exercised against a Fed chair absent criminal wrongdoing or serious misconduct. Powell's term as Federal Reserve chair expires in May 2026, and Trump has indicated he will nominate a successor.

The investigation sparked bipartisan backlash from former Fed officials, economists, and lawmakers who warned it threatens Federal Reserve independence—a cornerstone of U.S. economic policy. Critics argued using federal prosecutors to investigate the Fed chair over policy disagreements sets a dangerous precedent for politicizing monetary policy decisions.

🏛️Government📜Constitutional Law💰Economy

People, bills, and sources

What You Can Do

1

civic action

Contact Senate Banking Committee members to demand they protect Fed independence

The Senate Banking Committee oversees the Federal Reserve and can hold hearings on DOJ overreach. Committee members need to hear constituent concerns about politicizing monetary policy.

www.banking.senate.gov

Hi, I'm calling to demand the Banking Committee protect Federal Reserve independence.

Key points to mention:

  • DOJ opened criminal investigation into Fed Chair Powell over his congressional testimony
  • This threatens Fed independence established by Federal Reserve Act of 1913
  • Trump has publicly pressured Powell to cut rates despite inflation above 2% target
  • Chair Hill (R-AR) warned probe 'could undermine sound monetary policy decisions'

Questions to ask:

  • Will the committee hold oversight hearings on DOJ's investigation?
  • What actions will the committee take to protect Fed independence?
  • Will the committee investigate whether White House directed this probe?

Specific request: I want the committee to hold public hearings and pass a resolution affirming Fed independence from political pressure.

Thank you for your time.

2

civic action

Contact House Financial Services Committee to demand investigation of DOJ overreach

Chair French Hill (R-AR) already defended Powell's integrity. The committee has oversight authority over Fed operations and DOJ's treatment of financial regulators.

financialservices.house.gov

Hi, I'm calling to support Chairman Hill's defense of Fed Chair Powell and request committee investigation of DOJ overreach.

Key points to mention:

  • Chairman Hill called Powell 'a person of the highest integrity'
  • Criminal investigation threatens Fed's ability to make sound policy decisions
  • Federal Reserve Act allows removal only 'for cause,' not policy disagreements
  • Former Fed Chairs Volcker, Bernanke, and Yellen called investigation 'unprecedented assault'

Questions to ask:

  • Will the committee investigate whether DOJ violated Fed independence protections?
  • What legislative fixes can protect Fed from future political retaliation?

Specific request: I want the committee to hold hearings and consider legislation strengthening Fed independence protections.

Thank you.

3

civic action

Submit public comment to Federal Reserve supporting Powell's independence

The Fed accepts public comment on regulatory matters. Public support can strengthen Powell's position and create record of citizen concern about political interference.

www.federalreserve.gov/aboutthefed/contact-us-topics.htm

I'm writing to express strong support for Federal Reserve independence and Chair Powell's resistance to political pressure.

Key points to include:

  • DOJ's criminal investigation appears motivated by Fed's refusal to cut rates on political timeline
  • Independent monetary policy is essential for economic stability and currency confidence
  • Federal Reserve Act protections exist specifically to prevent presidential coercion
  • Bipartisan leaders including Chair Hill (R) and Sen. Warren (D) oppose investigation

Specific request: I urge the Federal Reserve Board to continue making monetary policy decisions based solely on economic data and the Fed's dual mandate of price stability and maximum employment, not political preferences.

Sincerely, [Your name and city]