The US Attorney’s Office in Washington, DC has launched a criminal investigation into Jerome H. Powell, the chairman of the Federal Reserve, according to The New York Times. According to the report, the probe looks into the massive renovation of the Fed’s headquarters and checks whether Powell gave false or misleading information to Congress about how big and costly the project really was.
Powell, however, has rejected that framing outright, calling the renovation angle a “pretext” and linking the threat of criminal charges to the Fed’s refusal to bow to political pressure on interest rates, according to Bloomberg. People briefed on the matter told NYT that investigators are reviewing Powell’s public statements and investigating spending records linked to the renovation.
Video message from Federal Reserve Chair Jerome H. Powell: https://t.co/5dfrkByGyX pic.twitter.com/O4ecNaYaGH
— Federal Reserve (@federalreserve) January 12, 2026
Powell responds to DOJ subpoenas
Federal Reserve Chair Jerome H. Powell broke his silence after the Department of Justice served the Federal Reserve with grand jury subpoenas, threatening him with a possible criminal indictment. According to The New York Times, the investigation was approved in November by Jeanine Pirro, who heads the US attorney’s office in Washington. Pirro is a longtime ally of President Donald Trump and was appointed to the role last year. Officials said she gave the green light for the inquiry after concerns were raised about the renovation project.
Powell said the threat of criminal charges is not connected to what he told Congress or the renovation project itself. “Those are pretexts,” he said. He emphasised that the Federal Reserve made every effort to keep Congress informed about the project through testimony and public disclosures. “This unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure,” he said. “This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions — or whether monetary policy will be directed by political pressure or intimidation,” Powell added.
He continued, “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 probe into Powell is part of a bigger clash between Trump and the Federal Reserve, after Powell refused to cut interest rates, as the president has demanded. Trump has also tried to remove another Fed official, Governor Lisa D. Cook, accusing her of mortgage fraud.
The renovation began in 2022 and is expected to finish in 2027. The project is now estimated to be about $700 million over budget. The work involves updating and expanding the Marriner S. Eccles Building, which was built in 1935, along with another Fed building on Constitution Avenue that dates back to 1932. The Federal Reserve has said neither building has undergone a full renovation since it was first built nearly 100 years ago.
Trump to approve new Fed Chair
The Federal Reserve declined NYT’s request to comment on the investigation. Trump has repeatedly criticised Powell and has even threatened to fire him, despite the fact that he himself nominated Powell for the job in 2017. The president had also floated the idea of suing Powell over the renovation project, which has a price tag of about $2.5 billion. Trump has publicly described the situation as “incompetence.”
In an interview with The New York Times last week, Trump said he has already decided who he wants to replace Powell with as Fed chair and plans to announce it soon. Kevin A. Hassett, Trump’s top economic adviser, is seen as a leading candidate for the role.
Powell’s term as Fed chair ends in May, but his position as a Fed governor runs until January 2028. So far, Powell has not said whether he plans to stay at the central bank after this year.
Under US law, presidents can only remove Federal Reserve officials for “cause,” which usually means serious wrongdoing or failure to do their job. The Supreme Court is set to hear arguments in Cook’s case on January 21.
Congress gave the Federal Reserve independence from the White House so that presidents cannot interfere with interest-rate decisions for political gain. Lawmakers said the Fed’s main goals should be keeping inflation under control and supporting a strong job market.
How is the investigation taking shape
A 2021 version of the renovation proposal mentioned private elevators, special dining rooms for top officials, water features, new marble installations, and even a rooftop terrace for staff. During a congressional hearing in June, Powell pushed back against claims that these luxury features were still part of the plan. He told lawmakers there was no VIP dining room, no new marble, and no special elevators. After his testimony, the Fed published a detailed FAQ on its website backing up Powell’s statements.
It is still unclear whether Pirro has called a grand jury or issued subpoenas. However, prosecutors from her office have contacted Powell’s staff several times, asking for documents related to the renovation. One official familiar with the case told the NYT, these requests are part of an ongoing investigation.
Starting an investigation does not guarantee charges will follow. Federal prosecutors must gather strong evidence before they can convince a grand jury to issue an indictment.