January 12, 2026
DOJ launches criminal probe of Fed Chair Jerome Powell
Criminal probe threatens Fed independence amid Trump rate-cut pressure
🏛️Government📜Constitutional Law💰Economy
Federal prosecutors opened a criminal investigation into Federal Reserve Chair Jerome Powell, which he confirmed in a statement on Sunday, Jan. 11, 2026. The Department of Justice served the Federal Reserve with grand jury subpoenas on Friday, Jan. 10, 2026, threatening criminal indictment over Powell's testimony regarding the Fed's headquarters renovation.
The investigation focuses on Powell's oversight of the Federal Reserve's $2.5 billion headquarters renovation project and whether he lied to Congress about the cost and scope of the project, which exceeded its original budget. Powell testified before the Senate in Jun. 2025 about the multi-year renovation addressing alleged cost overruns.
Powell characterized the investigation as a "pretext" masking the Trump administration's real motive: pressuring the Federal Reserve to lower interest rates more aggressively. Powell stated this represents an unprecedented escalation and is part of a yearlong hostile push by the administration to influence the central bank's monetary policy decisions.
U.S. Attorney for the District of Columbia Jeanine Pirro approved the criminal investigation in Nov. 2025. Pirro defended the probe amid bipartisan backlash, stating it addresses serious allegations about grand jury subpoenas related to Federal Reserve building renovations and cost management.
President Trump denied directing the investigation on Jan. 11, 2026, stating he knew nothing about it. However, Trump has a documented history of attacking Powell over interest rate policies and expressing desire to remove him. Trump's team was reportedly weighing a "gross incompetence lawsuit" against Powell as of Dec. 29, 2025.
If convicted of a crime, Powell could be removed from his position "for cause" by the President—a power that typically cannot be exercised against a Fed chair absent criminal wrongdoing or serious misconduct. Powell's term as Federal Reserve chair expires in May 2026, and Trump has indicated he will nominate a successor.
The investigation sparked bipartisan backlash from former Fed officials, economists, and lawmakers who warned it threatens Federal Reserve independence—a cornerstone of U.S. economic policy. Critics argued using federal prosecutors to investigate the Fed chair over policy disagreements sets a dangerous precedent for politicizing monetary policy decisions.
🏛️Government📜Constitutional Law💰Economy
Test Your Knowledge
10
Q1
When did DOJ serve Federal Reserve with Powell grand jury subpoenas?
Q2
Powell's term as Fed chair expires in which month of 2026?
Q3
The investigation threatens Federal Reserve independence from executive branch.
Q4
Stock markets closed higher or lower day after Powell disclosure?
Q5
Banking Committee vote could deadlock with single Republican defection.
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Start QuizPeople, bills, and sources
Jerome Powell
Federal Reserve Chair
Donald Trump
President of the United States
Jeanine Pirro
U.S. Attorney for the Southern District of New York
French Hill
House Financial Services Committee Chair (R-AR)
Janet Yellen
Former Treasury Secretary and Fed Chair
Scott Bessent
Treasury Secretary
John Thune
Senate Majority Leader (R-SD)
Elizabeth Warren
U.S. Senator (D-MA)
What you can do
1
civic action
Contact Senate Banking Committee members to demand they protect Fed independence
The Senate Banking Committee oversees the Federal Reserve and can hold hearings on DOJ overreach. Committee members need to hear constituent concerns about politicizing monetary policy.
Hi, I'm calling to demand the Banking Committee protect Federal Reserve independence.
Key points to mention:
- DOJ opened criminal investigation into Fed Chair Powell over his congressional testimony
- This threatens Fed independence established by Federal Reserve Act of 1913
- Trump has publicly pressured Powell to cut rates despite inflation above 2% target
- Chair Hill (R-AR) warned probe 'could undermine sound monetary policy decisions'
Questions to ask:
- Will the committee hold oversight hearings on DOJ's investigation?
- What actions will the committee take to protect Fed independence?
- Will the committee investigate whether White House directed this probe?
Specific request: I want the committee to hold public hearings and pass a resolution affirming Fed independence from political pressure.
Thank you for your time.
2
civic action
Contact House Financial Services Committee to demand investigation of DOJ overreach
Chair French Hill (R-AR) already defended Powell's integrity. The committee has oversight authority over Fed operations and DOJ's treatment of financial regulators.
Hi, I'm calling to support Chairman Hill's defense of Fed Chair Powell and request committee investigation of DOJ overreach.
Key points to mention:
- Chairman Hill called Powell 'a person of the highest integrity'
- Criminal investigation threatens Fed's ability to make sound policy decisions
- Federal Reserve Act allows removal only 'for cause,' not policy disagreements
- Former Fed Chairs Volcker, Bernanke, and Yellen called investigation 'unprecedented assault'
Questions to ask:
- Will the committee investigate whether DOJ violated Fed independence protections?
- What legislative fixes can protect Fed from future political retaliation?
Specific request: I want the committee to hold hearings and consider legislation strengthening Fed independence protections.
Thank you.
3
civic action
Submit public comment to Federal Reserve supporting Powell's independence
The Fed accepts public comment on regulatory matters. Public support can strengthen Powell's position and create record of citizen concern about political interference.
I'm writing to express strong support for Federal Reserve independence and Chair Powell's resistance to political pressure.
Key points to include:
- DOJ's criminal investigation appears motivated by Fed's refusal to cut rates on political timeline
- Independent monetary policy is essential for economic stability and currency confidence
- Federal Reserve Act protections exist specifically to prevent presidential coercion
- Bipartisan leaders including Chair Hill (R) and Sen. Warren (D) oppose investigation
Specific request: I urge the Federal Reserve Board to continue making monetary policy decisions based solely on economic data and the Fed's dual mandate of price stability and maximum employment, not political preferences.
Sincerely, [Your name and city]