WASHINGTON — In an unprecedented breach of protocol, Fed Chair Jerome Powell confirmed on Sunday that the Department of Justice (DOJ) has issued grand jury subpoenas to the Federal Reserve and is threatening him with a criminal indictment.
Thank you for reading this post, don't forget to subscribe!The Investigation: Fact vs. Pretext
The DOJ’s official inquiry centers on a $2.5 billion renovation of the Federal Reserve’s headquarters. Federal investigators are looking into whether Powell misled Congress during his 2025 testimony regarding budget overruns and the use of taxpayer funds for “ostentatious” upgrades.
However, Chair Powell has publicly dismissed the investigation as a “pretext,” framing it instead as a direct retaliatory strike for his refusal to lower interest rates at the President’s demand.
The Stakes for Independence
- The Fed’s Position: Powell warns that using the DOJ to target the central bank sets a dangerous precedent, shifting monetary policy from data-driven decisions to political coercion.
- The Administration’s Position: Attorney General Pam Bondi has maintained that the probe is a standard oversight measure to ensure accountability for government spending.
Political & Market Fallout
The news has triggered immediate pushback from across the aisle:
- Republicans: Some, like Sen. Thom Tillis, have voiced concerns over the “credibility” of the DOJ and are threatening to stall future Fed appointments.
- Democrats: Sen. Elizabeth Warren has called the move a “corrupt takeover” of the nation’s financial system.
- Global Markets: Analysts expect heightened volatility as investors weigh the risks of a central bank controlled by the White House.
The Big Picture: This confrontation represents the most significant challenge to the Federal Reserve’s independence in its 112-year history.
