Powell Faces Probe After Interest Rate Dispute

Clear Facts

• Federal Reserve Chairman Jerome Powell announced he is under investigation by the Department of Justice.
• Powell claims the Trump administration threatened him with indictment over his refusal to lower interest rates.
• Powell insists the criminal probe is politically motivated rather than about his Senate testimony or Fed building renovations.

Federal Reserve Chairman Jerome Powell revealed Friday that the Department of Justice has launched an investigation involving his testimony to the Senate Banking Committee last June.

He alleges the Trump administration’s actions are retaliation for his refusal to lower interest rates at the president’s request.

“On Friday, the Department of Justice served the Federal Reserve with grand jury subpoenas, threatening a criminal indictment related to my testimony before the Senate Banking Committee last June. That testimony concerned in part a multi-year project to renovate historic Federal Reserve office buildings,” Powell said.

Powell said he respects the rule of law, affirming: “No one—certainly not the chair of the Federal Reserve—is above the law.” He argued that the Trump administration’s pressure is unprecedented.

“But this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure,” he added.

He claims the real motivation is political, not related to building renovations or congressional oversight. “Those are pretexts. The threat of criminal charges 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 preferences of the President,” Powell said.

Powell highlighted that proper disclosures were made to Congress. He warned that political influence over monetary policy could set a dangerous precedent.

“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation,” Powell stated.

He affirmed his commitment to his duties regardless of political pressure. “I have served at the Federal Reserve under four administrations, Republicans and Democrats alike. In every case, I have carried out my duties without political fear or favor, focused solely on our mandate of price stability and maximum employment. Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people.”

President Trump has previously threatened to fire or sue Powell and has publicly accused him of “gross incompetence.”

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