Summary:
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Powell says DOJ threatened criminal indictment
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Grand jury subpoenas served on Friday
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Issue linked to Senate testimony on Fed renovation
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Powell calls move unprecedented and political
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Raises concerns over Fed independence
Powell responding to Trump’s latest slimy attack:
Powell says Justice Department threatened indictment in unprecedented challenge to Fed independence
Federal Reserve Chair Jerome Powell said the US Justice Department has threatened criminal charges against him in connection with his Senate testimony last year, describing the move as unprecedented and a direct challenge to the Federal Reserve’s independence.
In a statement released Friday, Powell said grand jury subpoenas were served earlier in the day and confirmed that the matter relates to his June testimony concerning the multiyear renovation of the Fed’s historic Washington headquarters. However, Powell stressed that the latest threat was “not about my testimony or the renovation project itself,” calling it a pretext rather than a substantive legal dispute.
Powell framed the episode as part of broader political pressure on the central bank, arguing that the threat of criminal charges stems from the Fed’s refusal to set interest rates in line with the president’s preferences. “The broader issue,” Powell said, “is whether the Federal Reserve will continue to set interest rates based on evidence and economics, or be directed by political pressure and intimidation.”
The Fed chair said he holds deep respect for the rule of law but warned the action should be viewed in the context of what he described as ongoing threats by the administration against the central bank. Powell added that he has carried out his duties “without political fear or favor” and intends to continue doing so.
The remarks mark a sharp escalation in tensions between the Fed and the executive branch, following months of criticism over the pace of rate cuts and scrutiny of the Fed’s costly headquarters renovation. Powell previously asked the Fed’s inspector general to review the project amid political attacks, seeking to demonstrate transparency as criticism intensified.
Any formal criminal case involving a sitting Fed chair would be without modern precedent and risks amplifying concerns about institutional independence at a sensitive point in the policy cycle. Powell’s term as Fed chair runs until mid-2026, making the episode especially significant as markets assess leadership continuity, credibility, and the Fed’s ability to operate free from political interference.
This article was written by Eamonn Sheridan at investinglive.com.