Jerome Powell says DOJ investigating Fed, calls it 'pretext'

Federal Reserve Chairman Jerome Powell announced Sunday that the Department of Justice has threatened him with criminal charges over testimony he gave to Congress last year.

He called the criminal investigation into his comments in June about the renovation of Federal Reserve buildings "pretexts" to punish him and the Fed for failing to set federal interest rates based on President Donald Trump's preferences.

"I have deep respect for the rule of law and for accountability in our democracy," Powell said in a video statement posted online. "No one, certainly not the chair of the Federal Reserve is above the law, but this unprecedented action should be seen in the broader context of the administration's threats and ongoing pressure.

"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."

The New York Times reported that the U.S. Attorney's Office for the District of Columbia was overseeing the investigation into the Federal Reserve. U.S. Attorney Jeanine Pirro, a Trump appointee and former Fox News host, leads the office.

Powell said the Federal Reserve received grand jury subpoenas from the Justice Department on Friday concerning his appearance before the Senate Banking Committee. During the hearing, he spoke about a multi-year project to renovate historic Fed office buildings.

Trump threatened to sue Powell in August over the the planned renovations, citing the "horrible and grossly incompetent job he has done in managing the construction of the Fed Buildings." The president said the cost of the renovations exceeded $3 billion, but all the project needed was a "$50 million dollar fix up."

During a tour of the renovations in July, Powell disputed Trump's claims that the project exceeded $3 billion, saying the estimate was closer to $2.5 billion.

Trump has repeatedly taken Powell to task for not cutting interest rates as frequently and by as much as he wants. Trump appointed Powell to his first four-year term in 2018, and former President Joe Biden renewed his position in 2022.

The president has said he plans to appoint a new chairman to the Fed when Powell's second term expires later this year.