US Fed chair Powell's first reaction as he is put under criminal investigation, says ‘standing firm in face of threats'
US Fed Chair Jerome Powell has accused the Justice Department of retaliating against the central bank for “setting interest rates based on our best assessment”, instead of bowing to pressure from Donald Trump.
United States Federal Reserve (Fed) Chairperson Jerome Powell in a video statement on 11 January accused the US Department of Justice (DoJ) of retaliation and claimed that legal action against the central bank is motivated by its refusal to set interest rates based on President Donald Trump's preferences.
The statement came as a direct response to the Justice Dept serving grand jury subpoenas to the Fed and threatening a criminal indictment related to Powell's June congressional testimony on ongoing renovations of the Fed’s headquarters.
Full text: What did Jerome Powell say?
“On Friday, the Department of Justice served the Federal Reserve with grand jury subpeonas threatening a criminal indictment related to my testimony before the Senate Banking Committee last June. That testimony concerned in part a multi-year project to renovate historic federal reserve office buildings,” he stated.
“I have deep respect for rule and accountability, and no one, certainly not chair is above the law. But this unprecedented action should be seen in the broader context of administration's threats and ongoing pressure. This new threat is not about my testimony or renovation of federal reserve buildings. It isn't about oversight role, Fed through public discourse made every effort to keep Congress informed,” he added.
Powell alleged, “Those are pretexts. 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. This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions — or whether instead monetary policy will be directed by political pressure or intimidation.”
“I have served with the Federal Reserve under four administrations — Republicans and Democrats alike. In every case, I have carried out my duties without political fear or favour, focused, solely on mandated price stability, and maximum employment. Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do with integrity and a commitment to serving the American people,” he stated.
WATCH: US Fed Chair Jerome Powell accuses Trump administration of retaliation
The US dollar weakened on the developments, falling against all its major counterparts; safe haven gold extended gains, jumping to new record high; and the futures on the S&P 500 Index fell 0.3%, according to a Bloomberg report.
The Comex silver rates also climbed to new all-time high $83.880 per ounce within a few minutes of the Opening Bell in the international market. According to commodity market experts, the MCX silver rate today may have a gap-up opening and may touch ₹2,60,000 per kg levels.
US attorney's office opens criminal investigation against Powell
Earlier, the New York Times cited sources to report that federal prosecutors in Washington DC have opened a criminal investigation into Powell, focused on the Fed’s long-running HQ renovation and whether the Fed chair made misleading statements to Congress about the project’s scale and cost.
The inquiry is being conducted by the US Attorney’s Office for the District of Columbia and involves a review of Powell’s public testimony as well as a detailed examination of internal spending records linked to the refurbishment. Sources told NYT the probe was authorised in November 2025 by Jeanine Pirro, a Donald Trump ally appointed to the office last year.
The action comes amid multiple critical statements against Powell by Trump, as the latter has repeatedly called on the central bank to cut interest rates. The US president also mused over dismissing Powell from the role, he himself appointed him to, in 2017.
Jerome Powell’s term as Fed chair expires in May 2026, though his appointment as a governor runs until January 2028. He has not publicly stated whether he intends to remain at the central bank beyond this year.