DOJ Subpoenas Federal Reserve Amid Threat of Criminal Charges, Powell Defends Central Bank Independence
Federal Reserve Chair Jerome Powell announced that the DOJ has subpoenaed the central bank and warned of possible criminal charges for his recent testimony over Fed facility upgrades. The federal government and the central bank, which is supposed to operate independently, are in a rare and fierce conflict.
Powell said the subpoenas relate to his June Senate Banking Committee testimony on the Federal Reserve’s $2.5 billion remodeling of two office facilities. Former President Donald Trump called the project’s spending extravagant.
Powell said the prospect of criminal action appeared to be a pretext to undermine Fed independence. He highlighted that central bank officials should set interest rates based on economic data and conditions, not political pressure or intimidation. Powell’s comments emphasize the Fed’s role in stabilizing the U.S. economy and making objective monetary policy decisions.
The Department of Justice will not discuss individual instances but said Attorney General Pam Bondi has ordered U.S. Attorneys to prioritize taxpayer fund misuse investigations. A U.S. Attorney Jeanine Pirro spokesman did not reply to calls for comment.
The possibility of criminal prosecution has politicians worried. One Republican senator said he would reject any Federal Reserve appointments, including Powell replacements, until this legal situation is resolved. This reaction shows the political sensitivity of the subject and the tight balance between government monitoring and central banking institution independence.
This follows continuous disagreements over the Fed’s interest rate decisions, with some political leaders wanting faster rate cuts. Powell’s position strengthens the idea that the Federal Reserve must be politically independent to ensure financial stability and confidence.
The legal actions are ongoing, and experts are monitoring them to determine how they may affect the Federal Reserve’s independence and US economic policy.
Sources :
Federal Reserve official statements
U.S. Department of Justice announcements
Senate Banking Committee records
