In a startling turn of events, the U.S. Department of Justice (DOJ) has initiated a criminal probe into Federal Reserve Chair Jerome Powell, marking an unprecedented escalation in the ongoing clash between the Federal Reserve and the Trump administration. Powell confirmed the investigation in a statement on Sunday night, revealing that federal prosecutors have set their sights on him in connection to the renovations of the Federal Reserve’s headquarters in Washington.
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The investigation comes on the heels of Powell’s steadfast refusal to bow to pressure from President Donald Trump to lower interest rates, a move that has strained the relationship between the Federal Reserve and the White House. Trump has been vocal in his criticism of Powell, accusing him of hindering economic growth by maintaining higher interest rates.
According to a report by the New York Times, the DOJ’s criminal inquiry into Powell represents a significant departure from the norm, as it is rare for the head of the Federal Reserve to come under such scrutiny. The investigation has sent shockwaves through the financial and political spheres, with many questioning the motives behind the probe and its potential implications for the independence of the Federal Reserve.
While the specifics of the investigation remain unclear, the timing of the probe has raised suspicions among some observers. Critics argue that the DOJ’s actions could be viewed as an attempt to exert political pressure on the Federal Reserve and undermine its ability to operate independently. The move has sparked concerns about the politicization of the central bank and the potential erosion of its credibility in the eyes of the public.
In response to the investigation, Powell has maintained his commitment to upholding the integrity and independence of the Federal Reserve. He has vowed to cooperate fully with the DOJ while emphasizing the importance of preserving the institution’s autonomy in making monetary policy decisions.
As the situation continues to unfold, it remains to be seen how the investigation will impact the relationship between the Federal Reserve and the Trump administration. The probe has reignited debates about the boundaries between political influence and central bank independence, raising questions about the future of monetary policy in the United States.
Overall, the DOJ’s criminal investigation into Fed Chair Jerome Powell has sparked controversy and uncertainty, underscoring the delicate balance between political pressures and institutional autonomy in the realm of monetary policy.
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References:
1. BBC News: https://www.bbc.com/news/articles/c801k7rkkd7o?at_medium=RSS&at_campaign=rss
2. ABC News: https://abcnews.go.com/Politics/doj-launches-criminal-investigation-fed-chair-jerome-powell/story?id=129114228
3. The New York Times: https://www.nytimes.com/2026/01/11/us/politics/jerome-powell-fed-inquiry-trump.html
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