Federal Reserve Chair Jerome Powell said Sunday that the U.S. Department of Justice issued subpoenas to the central bank on Friday, a move carrying the potential threat of criminal charges and sharply escalating tensions between the Trump administration and the independent monetary authority.
Powell said the subpoenas are connected to his June testimony before the Senate concerning renovations to Federal Reserve office buildings. He described the action as unprecedented and said it should be viewed in the broader context of what he characterized as sustained pressure from the administration aimed at influencing the Fed’s monetary policy decisions. “No one—certainly not the chair of the Federal Reserve—is above the law,” Powell said, adding that “this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.”
Video message from Federal Reserve Chair Jerome H. Powell: https://t.co/5dfrkByGyX pic.twitter.com/O4ecNaYaGH
— Federal Reserve (@federalreserve) January 12, 2026
According to Powell, the core issue is whether the central bank can continue to set interest rates free from political interference. “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,” he said. He dismissed the focus on the renovation project as a “pretext,” arguing that “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.”
The renovation has drawn criticism from administration officials over alleged cost overruns and mismanagement. Powell ordered an internal review by the Fed’s inspector general last summer, and the central bank has said the plans evolved over time.
President Donald Trump denied knowledge of the Justice Department investigation while renewing his criticism of Powell. “I don’t know anything about it, but he’s certainly not very good at the Fed, and he’s not very good at building buildings,” Trump said. Asked whether the subpoenas were intended to pressure the Fed to lower interest rates, Trump responded, “No. I wouldn’t even think of doing it that way,” adding, “What should pressure him is the fact that rates are far too high. That’s the only pressure he’s got.”
Powell said the latest developments would not prompt his resignation, despite repeated calls from Trump for him to step down, and said he would “continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people.”
Sen. Thom Tillis said the subpoenas removed any remaining doubt about efforts to undermine the Fed’s independence and pledged to oppose confirmation of any Trump nominees to the central bank until the matter is resolved.
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.
I… https://t.co/wDMH6twcD5— Senator Thom Tillis (@SenThomTillis) January 12, 2026
Financial markets showed limited immediate reaction.
The subpoenas come as the Trump administration continues to push for lower interest rates. The Fed cut rates three times last year in response to economic conditions, moves Trump has repeatedly criticized as insufficient. The Justice Department is also pursuing a separate investigation into mortgage fraud allegations against Fed Governor Lisa Cook, allegations she has denied through her legal team.
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