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By Peter Aitken and Adeola Adeosun
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Federal Reserve Chair Jerome Powell announced Sunday that the Department of Justice (DOJ) served the central bank with grand jury subpoenas on Friday, threatening a criminal indictment related to his congressional testimony about the Fed's building renovations.
In a video statement released Sunday evening, Powell directly challenged what he characterized as politically motivated intimidation aimed at undermining the Fed's independence in setting monetary policy. The subpoenas concern Powell's June testimony before the Senate Banking Committee regarding the Fed's $2.5 billion renovation of two historic office buildings that President Donald Trump has criticized as excessive.
Powell stated he will continue performing his duties despite the threats, declaring "public service sometimes requires standing firm in the face of threats."
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Newsweek reached out to the White House via email and the DOJ via online form on Sunday for comment.
Why It Matters
The controversy over the building renovations has become the vehicle for broader tensions about Fed independence and monetary policy. Powell's public pushback represents a dramatic departure from the Fed's typically restrained approach to presidential criticism. The central bank has previously attempted to placate the administration by dialing back some policies, such as efforts to consider climate change's impact on the banking system.
Powell joins a growing list of perceived Trump adversaries facing criminal investigations by the administration's Justice Department, which Trump has urged to prosecute political opponents, obliterating institutional guardrails that for generations kept investigative decisions independent of the White House.
What To Know
The Justice Department's action centers on Powell's June testimony regarding renovation costs for the Fed's 90-year-old Marriner S. Eccles building and an adjacent structure. The project has ballooned to $2.5 billion, about $600 million over budget, due to rising construction costs during the 2021-2022 inflation spike, unexpected asbestos removal needs, and Washington's building height restrictions requiring expensive underground construction.
White House budget director Russ Vought accused the Fed of an "ostentatious overhaul" featuring rooftop terrace gardens, VIP dining rooms, special elevators, water features, and premium marble. Powell disputed these claims during his June testimony, stating: "There's no VIP dining room. There's no new marble. There are no special elevators. There are no new water features. And there's no roof terrace gardens." The Fed says those elements were removed from initial 2021 plans submitted to the National Capital Planning Commission.
White House officials have also suggested Powell violated approval terms by changing the renovation plans, with deputy chief of staff James Blair stating the project appears misaligned with approved plans. The Fed maintains it is not subject to the commission's direction and is accountable to Congress through oversight by an independent inspector general, who Powell has asked to review the renovation costs.
The Justice Department stated Sunday that Attorney General Pam Bondi "has instructed her US Attorneys to prioritize investigating any abuse of tax payer dollars," though it declined to comment on specific cases.
Powell's Full Statement
"Good evening.
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.
I have deep respect for the rule of law and for accountability in our democracy. 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.
This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress's oversight role; the Fed through testimony and other public disclosures made every effort to keep Congress informed about the renovation project. 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.
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.
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.
Thank you."
What Happens Next
Republican Senator Thom Tillis of North Carolina, who also serves as a banking committee member, has vowed to oppose any future Fed nominees, including potential Powell replacements, until "this legal matter is fully resolved."
Powell's term expires in May 2026, and the Supreme Court has recently signaled Trump cannot fire him simply over interest rate disagreements, though removal "for cause" such as misconduct remains legally possible. The grand jury investigation will proceed under U.S. Attorney Jeanine Pirro's office.
Update 1/11/26, 9:30 p.m. ET: This article has been updated with additional information.
Reporting from the Associated Press contributed to this article.
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