DOJ TARGETS Fed Chair Powell – UNPRECEDENTED Criminal Probe

Department of Justice seal on American flag background.

The Department of Justice has launched an unprecedented criminal investigation into Federal Reserve Chair Jerome Powell, serving grand jury subpoenas that threaten to shatter the century-old wall between monetary policy and political interference.

Story Highlights

DOJ served Fed with grand jury subpoenas on January 9, 2026, targeting Powell’s congressional testimony about building renovations
Powell calls the action “unprecedented” political pressure tied to Trump administration demands for interest rate cuts
Markets responded negatively with dollar declining and gold rising as investors fear erosion of Fed independence
The criminal probe stems from testimony about Fed headquarters renovations that ballooned from $1.9 billion to $2.5 billion
Powell’s term expires in May 2026, intensifying political pressure as Trump seeks his replacement

The Subpoenas That Stunned Washington

Attorney General Pam Bondi’s Justice Department delivered grand jury subpoenas to the Federal Reserve on Friday, January 9, 2026, targeting Chair Jerome Powell’s June 2025 Senate Banking Committee testimony. Powell announced the development in a rare video statement two days later, describing the action as a pretext for broader political pressure over interest rate policies. The subpoenas focus on Powell’s defense of costly Fed building renovations, which he testified did not include extravagant features like new marble or water gardens.

The timing reveals the calculated nature of this assault on Fed independence. Powell’s testimony came during intense scrutiny from Trump administration officials, particularly OMB Chair Russell Vought, who labeled the renovation project “ostentatious” and potentially illegal. Powell had pushed back against these characterizations, calling criticisms of the project “misleading” and defending the Fed’s stewardship of taxpayer dollars.

Political Theater Masquerading as Oversight

This investigation represents nothing more than weaponized justice designed to intimidate an independent institution. Trump has repeatedly demanded aggressive interest rate cuts despite Powell’s measured approach to monetary policy based on economic data rather than political preferences. The President’s public threats to fire Powell, combined with his criticism of stable rates during low inflation periods, expose the true motivation behind these subpoenas.

FHFA Director Bill Pulte reportedly instigated the DOJ referral, though he now denies involvement as a GAO probe examines his own conduct. The web of political pressure extends beyond Powell to other Fed officials, including Governor Lisa Cook, whom Trump has targeted with unsubstantiated mortgage fraud claims that reached the Supreme Court. This coordinated campaign reveals a systematic effort to politicize monetary policy.

Market Chaos and Economic Consequences

Financial markets immediately signaled alarm over the unprecedented federal interference. The dollar weakened while gold prices surged as investors recognized the threat to institutional credibility that underpins global monetary stability. Mohamed El-Erian of Wharton and Allianz warned that Powell’s response would amplify market focus beyond the subpoenas themselves, creating lasting uncertainty about Fed independence.

The renovation costs that triggered this investigation pale compared to the economic damage from politicized monetary policy. While the Fed headquarters project did balloon from $1.9 billion to $2.5 billion, these overruns represent standard government construction challenges rather than criminal misconduct. The real scandal lies in using prosecutorial power to coerce policy changes that could reignite inflation and destabilize the economy.

Constitutional Crisis in the Making

Powell’s defiant stance deserves support from anyone who values institutional integrity over political expedience. His commitment to continue fulfilling the Fed’s dual mandate of price stability and employment, despite criminal threats, demonstrates the leadership America needs during this constitutional crisis. Even Republican Senator Thom Tillis questioned whether this investigation harms DOJ credibility, recognizing the dangerous precedent being set.

The Federal Reserve’s independence has served America well for over a century, insulating critical economic decisions from the political business cycle. Trump’s attempt to bulldoze this independence through criminal intimidation threatens not just monetary policy but the rule of law itself. Powell’s May 2026 term expiration adds urgency to this power struggle, as Senate confirmation battles loom for Trump’s preferred replacement who would presumably bend to presidential pressure on rates.