Lawmakers, former officials denounce DOJ’s criminal probe into Fed Chair Powell

Lawmakers from both parties and former U.S. monetary officials are sounding the alarm after Federal Reserve Chair Jerome Powell announced Sunday evening that President Donald Trump was attempting to pressure the central bank into cutting interest rates through the threat of criminal prosecution.

In a rare video statement, Powell said the Department of Justice (DOJ) had served the Fed with grand jury subpoenas over his congressional testimony last summer about the central bank’s recent renovations.

The investigation, which both Democrats and Republicans have denounced as politically motivated, marks a dramatic escalation of Trump’s attempt to take control of the Fed, an independent agency designed to make crucial monetary policy decisions without interference from the White House.

The probe into Powell has reignited concerns about executive overreach, the Fed’s independence and the strength of U.S. institutions more broadly.

For months, the president has attacked Powell and the Fed for resisting his demands to dramatically cut interest rates and has publicly raged at the chairman for his concerns about tariff-induced inflation. 

On multiple occasions, Trump has also threatened to fire Powell, whose term as Fed chair ends in May. 

“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,” Powell said. 

The DOJ’s investigation is being run out of the U.S. attorney’s office in the District of Columbia, which is led by Jeanine Pirro, a longtime ally of Trump, according to the New York Times.

The probe, which Pirro approved in November, includes an analysis of Powell’s comments before the Senate Banking Committee in June related to Fed’s $2.5 billion renovations at its headquarters.

During the hearing, Powell said that media reports about the renovations were misleading and inaccurate in many respects. However, Trump officials and the president’s allies in Congress have seized on the construction project in an attempt to oust Powell.

News of the investigation prompted immediate bipartisan criticism.

In a statement Sunday, Republican Sen. Thom Tillis (N.C.), a member of the Senate Banking Committee, threatened to vote against the president’s nominees to the Fed until the probe was resolved, saying it was clear that Trump officials were trying to undermine the independence of both the Fed and DOJ.

“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,” Tillis said. “It is now the independence and credibility of the Department of Justice that are in question.”

“I will oppose the confirmation of any nominee for the Fed—including the upcoming Fed Chair vacancy—until this legal matter is fully resolved,” Tillis said.

After speaking with Powell Monday, Alaska Sen. Lisa Murkowski (R) also rejected the investigation, calling it “nothing more than an attempt at coercion.” 

“If the Department of Justice believes an investigation into Chair Powell is warranted based on project cost overruns—which are not unusual—then Congress needs to investigate the Department of Justice,” Murkowski said.

On social media, Senate Minority Leader Chuck Schumer (D-N.Y.) warned that Trump’s assault on the Fed’s independence threatens “the strength and stability of our economy.”

“This is the kind of bullying that we’ve all come to expect from Donald Trump and his cronies,” Schumer said. “Anyone who is independent and doesn’t just fall in line behind Trump gets investigated.”

Separately, every living former Fed chair and multiple former Treasury secretaries from Republican and Democratic administrations released a joint statement Monday denouncing the DOJ’s probe.

“This is how monetary policy is made in emerging markets with weak institutions, with highly negative consequences for inflation and the functioning of their economies more broadly,” they said. “It has no place in the United States whose greatest strength is the rule of law, which is at the foundation of our economic success.”

While Trump claimed he didn’t know anything about the DOJ’s probe, on multiple occasions last year, he publicly directed the department to go after his political enemies or open explicitly partisan investigations. 

Trump’s orders — and the DOJ’s willingness to follow his directives — have severely eroded the department’s longstanding tradition of independence from the White House and apolitical law enforcement.

The investigation isn’t the only way Trump has tried to undermine the Fed’s independence and pressure the central bank into following his demands. 

Shortly after the Supreme Court explicitly said the Fed was an independent entity from the White House, Trump in August attempted to fire Federal Reserve Governor Lisa Cook, claiming she committed mortgage fraud long before the start of her term.

It marked the first time in U.S. history that a president had tried to dismiss a sitting member of the Federal Reserve Board. 

Cook, an appointee of  former President Joe Biden, sued, arguing that Trump didn’t have sufficient cause to fire her. So far, federal courts, including the Supreme Court, have ruled in Cook’s favor. 

Later this month, the Supreme Court is set to hear oral arguments in the case.