Fed Chair Powell Responds to DOJ Subpoenas

Federal Reserve Chair Jerome Powell announced that the central bank received grand jury subpoenas from the Department of Justice. In a rare video message, Powell stated that these subpoenas threaten a criminal indictment related to his testimony before the Senate Banking Committee in June. The testimony concerned a multi-year project to renovate historic Federal Reserve office buildings.

Powell characterized the legal threat as part of a broader pressure campaign by the Trump administration. He argued that the administration is using the renovation project as a pretext to push the central bank to lower interest rates. The conflict centers on whether the Fed will maintain its independence in setting monetary policy based on economic conditions.

In an unusual video message released early Sunday, Jerome Powell detailed the receipt of legal documents from the Department of Justice. Powell confirmed that the Federal Reserve had been served with grand jury subpoenas on Friday. These documents pose a threat of criminal indictment against the central bank.

The legal action is specifically tied to Powell's testimony given to the Senate Banking Committee in June. During that testimony, Powell discussed a multi-year project involving the renovation of historic Federal Reserve office buildings. The Department of Justice is investigating this testimony, though Powell suggests the true motivation lies elsewhere.

Powell explicitly linked the subpoenas to ongoing pressure from the Trump administration regarding interest rates. He stated that the threat of criminal charges is a direct consequence of the Federal Reserve's decision to set rates based on public interest rather than following the president's preferences. Powell described the renovation testimony as a mere pretext for this pressure.

The Federal Reserve Chair emphasized that the central bank made every effort to keep Congress informed about the renovation project through testimony and public disclosures. He argued that the current situation is not about congressional oversight or the renovation itself. Instead, it represents an attempt to direct monetary policy through political intimidation.

Powell reaffirmed his commitment to the rule of law and accountability. He acknowledged that no one, not even the Chair of the Federal Reserve, is above the law. However, he insisted that the unprecedented action must be viewed in the context of the administration's broader threats.

Powell highlighted his service under four different administrations, both Republican and Democrat. He stated that he has always carried out his duties without political fear or favor, focusing solely on the mandate of price stability and maximum employment. He concluded that public service requires standing firm in the face of threats and that he intends to continue his work with integrity.

The statement from Jerome Powell marks a significant escalation in the tension between the Federal Reserve and the executive branch. By publicly linking the Department of Justice's subpoenas to interest rate policy, Powell has drawn a clear line regarding central bank independence.

The situation remains fluid as the Federal Reserve faces the threat of criminal indictment. Powell's message serves as a defense of the institution's autonomy and a refusal to yield to what he describes as political intimidation.