Federal prosecutors have opened a criminal investigation into Federal Reserve chair Jerome Powell, he said on Sunday.
In a highly unusual move, Powell disclosed that the US Department of Justice (DoJ) served the agency with subpoenas and threatened a criminal indictment over testimony he gave to a Senate committee about renovations to Federal Reserve buildings.
Calling the probe “unprecedented”, Powell said he believed it was opened due to Donald Trump’s anger over the Fed’s refusal to cut interest rates despite repeated public pressure from the president.
Trump said he did not “know anything” about the investigation. The DoJ has been contacted for comment.
Until now, the long-running feud between Trump and Powell has been largely one-sided with the US president calling the banker “Mr. Too Late” and a “numbskull”.
Powell’s statement on Sunday is the first time he has publicly and robustly pushed back against Trump as he warned that the independence of the US central bank is at stake.
“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 said.
“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,” he went on to say.
Trump said in an interview with NBC News on Sunday that he did not have any knowledge of the DoJ’s investigation into the Fed.
“I don’t know anything about it, but he’s certainly not very good at the Fed, and he’s not very good at building buildings,” he said of Powell.
The Fed is undertaking the first renovation of two buildings, the Eccles and 1951 Constitution Avenue buildings, since their construction in the 1930s.
The “overhaul and modernisation” of the buildings includes health and safety work such as the removal of asbestos and lead contamination.
The Fed has said that the renovations will reduce its costs over time. But Trump has criticised the ballooning costs of the project, arguing it will cost $3.1bn (£2.3bn), much higher than the Fed’s $2.5bn forecast.
Powell is the latest to clash with Trump before facing a criminal investigation by the US DoJ.
Trump nominated Powell for the role as Fed chair in 2017 during his first term as president.
Powell is set to stand down in May and Trump is expected to name a successor as chair by the end of the month.
However, the DoJ investigation could hamper the process.
North Carolina Senator Thom Tillis, a Republican who is a member of the Senate Banking Committee, said he would oppose the nomination of Powell’s replacement by Trump, and any other Fed Board nominee, “until this legal matter is fully resolved”.
“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,” Tillis said in a statement.
“It is now the independence and credibility of the Department of Justice that are in question,” said the senator who is set to retire this year.
Senator Elizabeth Warren, a Democrat, said she believed Trump’s plan was to push Powell off the Fed board for good and “install another sock puppet to complete his corrupt takeover of America’s central bank”.
“This committee and the Senate should not move forward with any Trump nominee for the Fed, including Fed chair,” she said.
Powell’s investigation will be overseen by the US Attorney’s Office for the District of Columbia, according to the New York Times, which first reported the probe.
Trump has repeatedly threatened to remove Powell, who he has criticised for not cutting interest rates as quickly as the president would have liked.
In the second half of 2025, the Fed cut interest rates three times.
The president has consistently blamed his predecessor, Joe Biden, and interest rates for US inflation.
Critics have raised concerns that Trump’s pressure to oust the Fed chair would muddy the institution’s authority to set interest rates independently from presidents.
April Larusse, head of investment specialists at Insight Investment, told the BBC’s Today programme that “it really isn’t the case that the Federal Reserve has been doing nothing on interest rates so this does feel like perhaps it is pressure that isn’t really justified”.
The criminal probe into Powell, together with news of continued unrest in Iran, sparked a jump in the price of precious metals.
The price of gold – which is often seen a safer asset in times of uncertainty – was up 1.4% at $4,572.36 per ounce on Monday, having hit a record high of $4,600.33 earlier.
Silver also hit a record high – of $84.58 an ounce – before slipping back to $83.26 per ounce, a rise of 5.4% for the day.
But, despite Powell’s warning that the central bank’s independence is at risk, reaction on US markets was muted on Monday.
The S&P 500 stock index fell by 0.2%, the Dow Jones Industrial Average fell by 0.4% and the tech-heavy Nasdaq stayed flat in opening trade.
Trump previously took aim at Lisa Cook, a governor at the US central bank, whom he tried to fire over alleged mortgage fraud.
The case was blocked by a US federal court and will be heard by the Supreme Court later this month.
Criminal charges brought by Trump’s justice department against political adversaries like New York attorney general Letitia James, who brought a civil fraud case against Trump in 2024, and ex-Federal Bureau of Investigation boss James Comey were also dismissed by a court.
Comey was accused of making false statements and obstructing justice. He was fired by Trump during his first term after leading a probe into Russian interference in the 2016 US presidential election, which Trump won over Hillary Clinton.
Both Comey and James have maintained their innocence and said the prosecutions were politically charged.