DOJ Opens Criminal Investigation Into Fed Chair Jerome Powell
Jerome Powell criminal investigation Fed renovation
The U.S. Attorney’s Office for the District of Columbia has officially opened a criminal investigation into Federal Reserve Chair Jerome Powell, focusing on the $2.5 billion renovation of the central bank’s Washington headquarters. According to reports confirmed on Sunday, January 11, 2026, the probe centers on whether Powell was truthful during his June 2025 testimony before the Senate Banking Committee regarding the scope and escalating costs of the project. The investigation was authorized by U.S. Attorney Jeanine Pirro, a prominent ally of President Donald Trump, who has frequently criticized Powell for his handling of interest rates and described the renovation as “grossly mismanaged.” Federal prosecutors are reportedly examining internal spending records and comparing them against Powell’s public statements to determine if he intentionally misled lawmakers about luxury features such as private elevators, water features, and expensive marble fittings.
In a rare and defiant video statement posted to the Federal Reserve’s website late Sunday, Chair Powell confirmed that the Department of Justice served the central bank with grand jury subpoenas on Friday. Powell characterized the investigation as a “pretext” and an “unprecedented challenge” to the independence of the Federal Reserve. He alleged that the threat of criminal prosecution is being used as a tool of political intimidation to pressure the central bank into lowering interest rates according to the President’s preferences. “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 stated. He vowed to remain in his post and continue his duties until his term as chair expires in May 2026, despite the looming legal battle and the President’s public claims that a successor has already been chosen.
The renovation project at the heart of the inquiry involves the comprehensive modernization of the nearly century-old Marriner S. Eccles Building and an adjoining structure on Constitution Avenue. While the Federal Reserve has argued that the upgrades are essential for safety—including the removal of asbestos and lead—the budget has reportedly ballooned by more than $700 million over initial estimates. During his June testimony, Powell denied that the “luxury” elements found in earlier 2021 proposals remained part of the current plan, famously stating there was “no new marble” and “no special elevators.” However, criminal referrals from lawmakers like Representative Anna Paulina Luna suggest that documents submitted to the National Capital Planning Commission may contradict those claims. The Justice Department has not officially commented on the specifics of the case, but a spokesperson for Attorney General Pam Bondi noted that U.S. Attorneys have been instructed to prioritize any potential abuse of taxpayer-funded resources.+3
The investigation has triggered a firestorm on Capitol Hill, with some Republican senators expressing concern that the move undermines the credibility of the Justice Department and the stability of the American financial system. North Carolina Senator Thom Tillis has already signaled he will oppose any future Fed nominees until the legal matter is fully resolved, citing fears that the administration is actively working to end the central bank’s autonomy. As the 119th Congress prepares for further hearings, the clash between the executive branch and the Federal Reserve has reached a historic boiling point. Financial analysts warn that the uncertainty surrounding Powell’s leadership and the potential for a criminal indictment could lead to increased market volatility as investors weigh the risks of political interference in monetary policy.
