Federal Reserve Chair Jerome Powell said on Sunday that federal prosecutors have opened a criminal investigation into him. In a video message, Powell said the US Justice Department has served the Federal Reserve with grand jury subpoenas and has threatened a possible criminal indictment.

The case is linked to testimony Powell gave last June before a Senate committee. That testimony included details about a long-running renovation of historic Federal Reserve buildings in Washington. Here’s everything to know about the charges and Powell’s statement.

What are the charges against Jerome Powell?

According to the NYT report, the probe is linked to a large renovation project at the central bank’s headquarters and questions over whether Powell gave misleading information to Congress about the project.

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Officials familiar with the matter said the investigation is looking closely at Powell’s public statements, along with records showing how much money was spent on the renovations.

What the renovation project involves

The renovation project linked to the probe began in 2022 and is expected to finish in 2027. It involves major upgrades to the Marriner S. Eccles Building and another Fed building on Constitution Avenue, both built in the 1930s. The project is now estimated to be around $700 million over budget.

The Fed has said the buildings had not been fully renovated since they were first constructed nearly 100 years ago. The work includes removing asbestos and lead, upgrading ageing systems, and making the buildings accessible for people with disabilities.

Dispute over luxury features

A 2021 proposal for the renovation highlighted features such as private elevators, dining areas for senior officials, water fountains, new marble work and a rooftop terrace for staff. At a congressional hearing in June, Powell pushed back against claims that the project included luxury upgrades.

“There’s no VIP dining room; there’s no new marble,” Powell told lawmakers, according to the NYT. He said the old marble was removed and reinstalled, with new pieces used only where the original stone broke. He also said there were no special elevators, only old ones already in place. Powell added that the plans had changed over time and that some features mentioned earlier were later dropped.

Fed tried to explain costs publicly

After Powell testified, the Federal Reserve published a detailed FAQ on its website backing up his statements. It also released photos, a virtual tour, and notes explaining changes from the earlier proposal.

The Fed said the rising costs were driven by higher prices for materials and labour, along with unexpected issues such as extra asbestos and contaminated soil found during construction.

Powell calls the move “unprecedented”

Powell described the investigation as unprecedented. He said he believes it began after he got on the bad side of President Donald Trump by refusing to cut interest rates despite repeated and public pressure from the White House. “This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions,” Powell said, “or whether monetary policy will instead be shaped by political pressure or intimidation.”

So far, neither the Justice Department nor the White House has publicly commented on the investigation.

Powell’s full statement

‘Consequence for not following the President’s preferences’

Powell said that he respects the rule of law and accountability. He said no one, including the Fed chair, is above the law. But he added that the action must be seen in a bigger context. “This unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure,” Powell said.

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He also rejected claims that the probe is really about the renovation project or about misleading Congress. Powell said the Fed made repeated efforts to keep lawmakers informed through testimony and public disclosures. “Those are pretexts,” he said. “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.”

Probe approved by Trump ally Jeanine Pirro

The investigation was approved in November by Jeanine Pirro, a longtime ally of President Donald Trump. She was appointed last year to lead the US Attorney’s office in Washington. This marks a major legal escalation against Powell, who has repeatedly clashed with Trump over interest rates.

Trump-Powell feud moves into legal territory

President Trump has long criticised Powell for refusing to cut interest rates as aggressively as he wanted. Trump has even threatened to fire Powell, despite being the one who nominated him as Fed chair back in 2017.

Trump had also floated the idea of suing Powell over the renovation project, which costs about $2.5 billion. He has publicly called Powell “incompetent” over the spending.

In the second half of 2025, the Federal Reserve cut interest rates three times, but Trump continued to argue that the cuts were not enough.

Trump picks next Fed Chair

Last week, Trump told The New York Times that he has already decided who he wants as the next Fed chair and will announce it soon. His top economic adviser, Kevin Hassett, is seen as a leading contender. Powell’s current term as Fed chair ends in May, but his role as a Fed governor runs until January 2028. He has not said whether he plans to stay on beyond this year.