DOJ Subpoenas Delivered to Fed; Powell Pledges Resilience

Federal Reserve Chair Jerome Powell recently revealed that the US central bank has received grand jury subpoenas from the Justice Department, signaling a significant escalation in the Trump administration’s ongoing conflict with the institution.

In a powerful statement released on Sunday evening, both in writing and via video, Powell indicated that the subpoenas were linked to his congressional testimony from June regarding renovations at the Fed’s headquarters. He emphasized that this action should be viewed within the broader context of the administration’s persistent threats and pressures.

“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president,” Powell stated. He further elaborated, “This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions — or whether instead monetary policy will be directed by political pressure or intimidation.”

In an interview with NBC News, President Donald Trump denied any knowledge of the DOJ’s investigation into the central bank. Following the news, US stock futures and the dollar weakened, while gold prices surged to record highs. Futures on the S&P 500 Index dropped as much as 0.7%.

Powell disclosed that the subpoenas were served on Friday, marking an unprecedented move by the Trump administration that intensifies the president’s long-standing feud with the Fed chair. Trump has consistently called for aggressive rate cuts, arguing that the Fed should act to enhance housing affordability and reduce government borrowing costs.

Additionally, Trump has expressed interest in firing Powell and has attempted to remove Fed Governor Lisa Cook, a case that the Supreme Court is set to address later this month.

Last month, Fed policymakers lowered their benchmark rate to a target range of 3.5% to 3.75%, marking the third consecutive quarter-point cut after maintaining steady rates throughout much of 2025. Officials have indicated they are not in a hurry to lower rates again until more data on inflation and employment becomes available.

Powell’s Future

In his statement, Powell affirmed his commitment to performing his duties “with integrity and a commitment to serving the American people.” First appointed as chair by Trump in 2018, Powell’s current term will expire in May, but his position as a Fed governor extends until 2028. He has not disclosed whether he plans to leave in May or remain at the central bank.

Trump has indicated he has already selected a nominee to replace Powell, although he has not publicly named a successor. Kevin Hassett, the director of the National Economic Council, is considered a leading candidate.

Republican Senator Thom Tillis, a member of the Senate Banking Committee overseeing the Fed, defended the central bank on Sunday night. He pledged to “oppose the confirmation of any nominee for the Fed — including the upcoming Fed chair vacancy — until this legal matter is fully resolved.” Without Tillis’ support, advancing any nominee out of the committee to the full Senate for confirmation could prove challenging.

“If there were any remaining doubt whether advisers within the Trump administration are actively pushing to end the independence of the Federal Reserve, there should now be none. It is now the independence and credibility of the Department of Justice that are in question,” Tillis remarked.

The investigation is being conducted by the US Attorney’s Office for the District of Columbia, according to sources familiar with the situation. Attorney General Pam Bondi has instructed US attorneys to investigate potential taxpayer abuse cases related to the matter.

The White House has referred inquiries to the Justice Department, which has not yet responded to requests for comment.

Renovation

Last summer, the Trump administration intensified scrutiny over the Fed’s renovation of two historic buildings, citing rising costs associated with the project. Fed budget documents indicate that cost estimates for the renovation have escalated to $2.5 billion in 2025, up from $1.9 billion in 2023.

The Fed has attributed these increased costs to discrepancies between initial and actual estimates for materials, equipment, and labor, as well as unforeseen issues like toxic contamination. During his June testimony, Powell disputed media reports and criticisms from administration officials and some congressional Republicans that the project included extravagant features such as a VIP dining room and rooftop gardens.

Powell noted that the project’s plans had “continued to evolve,” and some earlier features “are no longer in the plans.” Office of Management and Budget Director Russ Vought referenced Powell’s testimony in a letter sent to him last July, requesting further details on the renovation. Bill Pulte, director of the Federal Housing Finance Administration and a vocal critic of Powell, has alleged that Powell misrepresented specifics about the project during his testimony, suggesting this could provide sufficient legal grounds to justify removing him from his position.

At that time, Republican Representative Anna Paulina Luna also urged the DOJ to investigate and potentially prosecute Powell for allegedly lying under oath during his testimony.

Amid the controversy, Trump visited the renovation site, indicating that the project alone was not a valid reason to dismiss Powell. However, on December 29, Trump mentioned he was contemplating a “gross incompetence” lawsuit against Powell concerning the renovation.

Under the law that established the Fed, the president can only remove members of the Board of Governors for cause, typically interpreted as inefficiency, malfeasance, or neglect of duty. Mark Spindel, author of The Myth of Independence: How Congress Governs the Federal Reserve, commented on the subpoenas, stating, “It sounds like Trumpian vengeance and pressuring him to leave in May. If Powell hung around on the board, that complicates Trump’s majority — he needs the seats.”

Photo: Jerome Powell. Photographer: Al Drago/Bloomberg

Copyright 2026 Bloomberg.

Federal Reserve Chair Jerome Powell recently revealed that the US central bank has received grand jury subpoenas from the Justice Department, signaling a significant escalation in the Trump administration’s ongoing conflict with the institution.

In a powerful statement released on Sunday evening, both in writing and via video, Powell indicated that the subpoenas were linked to his congressional testimony from June regarding renovations at the Fed’s headquarters. He emphasized that this action should be viewed within the broader context of the administration’s persistent threats and pressures.

“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president,” Powell stated. He further elaborated, “This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions — or whether instead monetary policy will be directed by political pressure or intimidation.”

In an interview with NBC News, President Donald Trump denied any knowledge of the DOJ’s investigation into the central bank. Following the news, US stock futures and the dollar weakened, while gold prices surged to record highs. Futures on the S&P 500 Index dropped as much as 0.7%.

Powell disclosed that the subpoenas were served on Friday, marking an unprecedented move by the Trump administration that intensifies the president’s long-standing feud with the Fed chair. Trump has consistently called for aggressive rate cuts, arguing that the Fed should act to enhance housing affordability and reduce government borrowing costs.

Additionally, Trump has expressed interest in firing Powell and has attempted to remove Fed Governor Lisa Cook, a case that the Supreme Court is set to address later this month.

Last month, Fed policymakers lowered their benchmark rate to a target range of 3.5% to 3.75%, marking the third consecutive quarter-point cut after maintaining steady rates throughout much of 2025. Officials have indicated they are not in a hurry to lower rates again until more data on inflation and employment becomes available.

Powell’s Future

In his statement, Powell affirmed his commitment to performing his duties “with integrity and a commitment to serving the American people.” First appointed as chair by Trump in 2018, Powell’s current term will expire in May, but his position as a Fed governor extends until 2028. He has not disclosed whether he plans to leave in May or remain at the central bank.

Trump has indicated he has already selected a nominee to replace Powell, although he has not publicly named a successor. Kevin Hassett, the director of the National Economic Council, is considered a leading candidate.

Republican Senator Thom Tillis, a member of the Senate Banking Committee overseeing the Fed, defended the central bank on Sunday night. He pledged to “oppose the confirmation of any nominee for the Fed — including the upcoming Fed chair vacancy — until this legal matter is fully resolved.” Without Tillis’ support, advancing any nominee out of the committee to the full Senate for confirmation could prove challenging.

“If there were any remaining doubt whether advisers within the Trump administration are actively pushing to end the independence of the Federal Reserve, there should now be none. It is now the independence and credibility of the Department of Justice that are in question,” Tillis remarked.

The investigation is being conducted by the US Attorney’s Office for the District of Columbia, according to sources familiar with the situation. Attorney General Pam Bondi has instructed US attorneys to investigate potential taxpayer abuse cases related to the matter.

The White House has referred inquiries to the Justice Department, which has not yet responded to requests for comment.

Renovation

Last summer, the Trump administration intensified scrutiny over the Fed’s renovation of two historic buildings, citing rising costs associated with the project. Fed budget documents indicate that cost estimates for the renovation have escalated to $2.5 billion in 2025, up from $1.9 billion in 2023.

The Fed has attributed these increased costs to discrepancies between initial and actual estimates for materials, equipment, and labor, as well as unforeseen issues like toxic contamination. During his June testimony, Powell disputed media reports and criticisms from administration officials and some congressional Republicans that the project included extravagant features such as a VIP dining room and rooftop gardens.

Powell noted that the project’s plans had “continued to evolve,” and some earlier features “are no longer in the plans.” Office of Management and Budget Director Russ Vought referenced Powell’s testimony in a letter sent to him last July, requesting further details on the renovation. Bill Pulte, director of the Federal Housing Finance Administration and a vocal critic of Powell, has alleged that Powell misrepresented specifics about the project during his testimony, suggesting this could provide sufficient legal grounds to justify removing him from his position.

At that time, Republican Representative Anna Paulina Luna also urged the DOJ to investigate and potentially prosecute Powell for allegedly lying under oath during his testimony.

Amid the controversy, Trump visited the renovation site, indicating that the project alone was not a valid reason to dismiss Powell. However, on December 29, Trump mentioned he was contemplating a “gross incompetence” lawsuit against Powell concerning the renovation.

Under the law that established the Fed, the president can only remove members of the Board of Governors for cause, typically interpreted as inefficiency, malfeasance, or neglect of duty. Mark Spindel, author of The Myth of Independence: How Congress Governs the Federal Reserve, commented on the subpoenas, stating, “It sounds like Trumpian vengeance and pressuring him to leave in May. If Powell hung around on the board, that complicates Trump’s majority — he needs the seats.”

Photo: Jerome Powell. Photographer: Al Drago/Bloomberg

Copyright 2026 Bloomberg.