Federal Reserve Chair Powell says DOJ has subpoenaed central bank, threatens criminal indictment

Federal Reserve Chair Jerome Powell revealed that the Department of Justice has issued subpoenas to the central bank and threatened criminal indictment. This action stems from Powell's testimony regarding the Fed's $2.5 billion building renovation project, which President Trump has criticized. Powell stated that the threat of criminal charges is a pretext to undermine the Fed's independence in setting interest rates, asserting that monetary policy should be based on evidence, not political pressure. This development marks an escalation in the conflict between President Trump and the independent agency, potentially rattling financial markets and increasing borrowing costs. Trump has repeatedly attacked the Fed for its interest rate policies and has sought to replace Fed officials. The subpoenas raise concerns about the compromise of the Fed's independence, which could impact global investor confidence. While Trump denied knowledge of the investigation, a Republican senator expressed opposition to any future Fed nominees until the legal matter is resolved, questioning the independence of the Justice Department. The Justice Department stated it cannot comment on specific cases but emphasized the prioritization of investigating taxpayer dollar abuse.