U.S. Prosecutors Launch Criminal Investigation into Federal Reserve Chair

Source: Cryptonews Original Title: U.S. prosecutors open criminal probe into Fed Chair Jerome Powell Original Link:

Background

U.S. prosecutors are investigating Federal Reserve Chair Jerome Powell’s conduct, a move that critics view as an escalating confrontation over the central bank’s independence.

Key Developments

The Department of Justice has opened a criminal investigation into Powell tied to his congressional testimony. Powell confirmed that prosecutors served the Federal Reserve with grand jury subpoenas related to his testimony before the Senate Banking Committee.

Investigation Focus

The investigation centers on renovation costs and whether Powell misled lawmakers about the scope and expense of a $2.5 billion renovation of the Fed’s historic headquarters in Washington, D.C. The inquiry followed a referral from a Republican member of Congress, who accused Powell of making false statements to Congress.

Powell pushed back on the premise of the probe, arguing that Congress had been kept informed through testimony and public disclosures.

Powell’s Response

Powell characterized the investigation as retaliation for monetary policy decisions that ran counter to demands for faster interest rate cuts. He stated: “This is about whether the Fed will continue to set interest rates based on evidence and economic conditions, or whether monetary policy will be directed by political pressure.”

The administration has framed the probe as focused on accountability and the use of taxpayer funds.

Political Implications

The investigation marks a sharp escalation in tensions between the executive branch and the central bank. Republican Senator Thom Tillis warned that the investigation risks undermining the Fed’s independence and said he would oppose future Fed nominees until the matter is resolved.

Powell, who has served under four administrations, said he intends to remain in his role and continue carrying out the Fed’s mandate. He emphasized that the central bank must remain insulated from political intimidation, stating: “Public service sometimes requires standing firm.”