Jerome Powell says Justice Department threatens lawsuit

Federal Reserve (Fed) Chairman Jerome Powell said in a statement that the U.S. Department of Justice had threatened criminal prosecution against him in connection with his Senate testimony last June, during which he discussed the estimated $2.5 billion renovation.

“On Friday, the Justice Department served the Federal Reserve with grand jury subpoenas, threatening it with criminal indictments related to my testimony before the Senate Banking Committee last June,” Powell said.

Video message from Federal Reserve Chairman Jerome H. Powell: pic.twitter.com/O4ecNaYaGH

– Federal Reserve (@federalreserve) January 12, 2026

According to Powell, this decision is unprecedented and a direct challenge to the independence of the Fed.

The launch of the investigation by the U.S. attorney’s office in Washington, approved in November by Jeanine Pirro, an ally of President Trump appointed last year to lead the office, includes a review of Powell’s public testimony and a review of spending related to the project.

Trump opens new legal front against Fed Chairman Powell amid disputes over rate cut

The recent investigation now opens a major new legal front against Powell, whom Trump has repeatedly attacked for resisting demands to drastically cut interest rates.

President Trump has publicly and repeatedly threatened to fire the Fed chairman, even though he was appointed in 2017, and raised the possibility of legal action over the renovation, which he called “incompetence.”

Even as Powell stands tall and respects accountability, he has repeatedly cautioned that the action must be seen in the broader political context of the administration’s continued threats and pressure.

“This new threat is not about my testimony last June or the renovation of the Federal Reserve buildings. It is not about Congress’s oversight role,” he said.

Instead, Powell directly linked the threat to monetary policy decisions. “These are pretexts. The threat of criminal prosecution 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 president’s preferences,” he said.

Powell has now said he will continue to carry out his duties without bowing to pressure.

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