Fed chair Powell hits out at ‘unprecedented’ probe by US justice department

Federal prosecutors have launched a criminal investigation into US Federal Reserve Chair Jerome Powell over testimony he gave to a Senate committee about costly renovations to Fed buildings. Powell said the Justice Department issued subpoenas and threatened indictment, calling the move “unprecedented” and politically motivated, linked to President Donald Trump’s anger that the Fed did not cut interest rates as he wanted.

Powell warned that the probe threatens the independence of the central bank, saying interest-rate decisions should be based on economic evidence, not political pressure. Trump denied knowing about the investigation but continued to criticise Powell.

Former Fed chair Janet Yellen called the probe “extremely chilling” and said it could unsettle markets. The renovations, first undertaken since the 1930s, include safety upgrades like asbestos removal, but Trump has attacked their rising cost.

The investigation has triggered strong political reactions, with some senators saying they will block new Fed nominations until the case is resolved. While precious metal prices jumped on uncertainty, US stock markets showed only mild declines.