The U.S. Department of Justice just opened a criminal investigation into Fed Chair Jerome Powell. This occurs after a streak of interest rate cuts and increasing friction with President Donald Trump. The probe’s gone on to receive rampant unfavorable press, especially from the New York Times. It comes on the heels of Powell’s testimony before a Senate appropriations committee advocating for $390 million in renovations to the Federal Reserve’s various buildings.
During the second half of 2025, the Fed dropped interest rates by three major moves. It’s this decision that has really caught Trump’s ire.… The President frequently and publicly pressured Powell to lower rates more aggressively, bringing the two men’s relationship to a breaking point. Powell’s unwillingness to adhere to Trump’s campaign has been pointed to as the smoking gun that could spark the probe.
Subpoenas on Powell were served to her by Trump’s own Justice Department, which had already begun to signal Trump’s criminal indictment was likely. This inquiry will be conducted under the supervision of the U.S. Attorney’s Office for the District of Columbia. At the time, Powell termed the inquiry “unprecedented.” He indicated that it’s indicative of the bigger pressures being put elsewhere by the administration.
“No one, certainly not the chair of the Federal Reserve is above the law, but this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure,” – [unattributed]
Senator Thom Tillis, a Republican member of the Senate Banking Committee, very much does not want to see Trump replace Powell with anyone. He agrees that these should be set aside until the legal issue is sorted out. He made this announcement particularly notable by declaring that he would similarly oppose any other nominees for the Federal Reserve Board if similar circumstances applied.
The senator further laid out his opinion on the investigation’s implications. He said it creates deep fears about the independence of the Federal Reserve. He noted, “If there were any remaining doubt whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none.”
Powell has defended his position, stating, “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 has defended his position, stating, “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.”