Politics

Federal Reserve Chair confirms criminal investigation; Senator vows to block nominees

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Jan 12, 2026

THE BARE STORY

Federal Reserve Chair Jerome Powell announced on Sunday that the Department of Justice has launched a criminal investigation into his conduct. According to a video statement released by the Chair, the Federal Reserve received grand jury subpoenas on Friday related to testimony Powell delivered to the Senate Banking Committee last year regarding the renovation of the central bank’s headquarters.

Powell characterized the investigation as a challenge to the Federal Reserve's independence and a pretext to pressure the institution into lowering interest rates. The inquiry focuses on the multi-year renovation project, which administration officials and some lawmakers have previously criticized for cost overruns. Specific allegations involve whether Powell made false statements or committed perjury during his congressional testimony concerning the project.

President Donald Trump denied having prior knowledge of the probe but criticized Powell’s performance, reiterating his view that interest rates remain too high. A spokesperson for Attorney General Pam Bondi did not comment on the specific case but noted that the Attorney General has instructed prosecutors to prioritize investigations into the abuse of taxpayer funds.

The revelation has provoked a sharp response within the Senate Banking Committee. Republican Senator Thom Tillis stated he would block the confirmation of any future Federal Reserve nominees until the legal matter is resolved, arguing that the investigation raises questions about the independence of both the Fed and the Justice Department. Democratic senators also condemned the probe, with some describing it as an abuse of authority intended to compromise the central bank's autonomy. Powell’s term as chair is set to expire in May 2026.

Same Facts. Different Perspectives.

Two AI models. Two viewpoints. One factual foundation.

Perspective by Claude

• The investigation is viewed as a pretext to influence monetary policy Federal Reserve Chair Jerome Powell characterized the criminal inquiry as a challenge to the central bank's institutional independence. He suggested that the investigation is being used as a tool to pressure the Federal Reserve into lowering interest rates rather than addressing a legitimate legal grievance.

• Senators raise concerns about the misuse of prosecutorial authority Members of the Senate Banking Committee, including Democratic senators, condemned the probe as a potential abuse of power designed to compromise the Federal Reserve’s autonomy. Republican Senator Thom Tillis also expressed concern, arguing that the investigation raises serious questions regarding the independence of both the central bank and the Department of Justice.

• Legislative roadblocks will be enacted until the matter is resolved In response to the Department of Justice's actions, Senator Tillis announced his intention to block the confirmation of any future Federal Reserve nominees. He stated that this obstruction would remain in effect until the legal issues surrounding the investigation and the subpoenas are settled.

How it may affect me

As a U.S. reader:

• Decisions on interest rates impacting your loans and savings may face uncertainty, as Chair Powell alleges the probe is an attempt to force the Fed to lower rates.

• You may see gridlock affecting central bank leadership, as Senator Thom Tillis plans to block confirmation of all future Federal Reserve nominees until the legal matter concludes.

• Oversight of public spending could intensify following the Attorney General's instruction to prioritize investigations into the abuse of taxpayer funds, specifically regarding construction cost overruns.

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