Federal Prosecutors Launch Probe Into Powell Says Report
A dramatic new front has opened in the already tense standoff between the Trump administration and the Federal Reserve. Federal prosecutors have launched a criminal investigation into Federal Reserve Chairman Jerome Powell and the central bank’s $2.5 billion headquarters renovation — a move that could send shockwaves through the global financial system and challenge the long-standing independence of U.S. monetary policy.
The investigation, led by Trump-appointed U.S. Attorney Jeanine Pirro, centers on whether Powell misled Congress during his June 2025 testimony about the ballooning costs of the Fed’s multi-year renovation of its Washington complex. The Department of Justice served grand jury subpoenas to the Federal Reserve on Friday, threatening criminal indictment — an extraordinary escalation in what is already a historic confrontation between the White House and the central bank.
In a rare and forceful video statement released Sunday night, Powell responded with unambiguous resolve. “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,” Powell said, “rather than following the preferences of the President.” His message: this investigation isn’t about renovation budgets — it’s about monetary independence.
The project in question — the renovation of the Marriner S. Eccles Building and the adjacent Federal Reserve East Building — was originally estimated at $1.9 billion in 2021. But updated projections now peg the total cost at $2.5 billion, thanks to a combination of factors: inflation, asbestos removal, advanced security retrofits, and unforeseen construction obstacles.
Video message from Federal Reserve Chair Jerome H. Powell: https://t.co/5dfrkByGyX pic.twitter.com/O4ecNaYaGH
— Federal Reserve (@federalreserve) January 12, 2026
Critics of the Fed, including members of the Trump administration, argue that the surge in costs is emblematic of mismanagement and possible deceit. Justice Department spokesman Chad Gilmartin said the investigation reflects a broader commitment to tracking “any abuse of taxpayer dollars.” Yet Powell insists this is not a fiscal accountability issue — it’s a veiled political attack on the Fed’s ability to do its job.
“This new threat is not about my testimony last June,” Powell said. “Those are pretexts.”
Indeed, the larger stakes are hard to miss. Powell’s term as Fed Chair ends in May 2026, and Trump has already confirmed to The New York Times that he’s chosen a successor — though the name remains undisclosed. The implication is clear: Powell’s days are numbered regardless of legal outcomes, and this investigation may serve as both a political message and a strategic clearing of the runway for new leadership at the Fed.
Still, Powell made clear he has no plans to step aside. “I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people.”
This is more than a fight over renovation receipts or Senate testimony. It’s a profound test of whether America’s central bank can remain a politically independent institution in a time of deepening partisanship and executive assertiveness. For now, Powell appears determined to hold the line. Whether he can do so — and for how long — is now a question as much for the courts as for the markets.