Fed’s Powell links DOJ probe to his defiance of Trump on rates

Federal Reserve chair Jerome Powell has blasted the Trump administration over a new criminal probe, arguing it’s the latest attempt to destroy the central bank’s independence on interest rates.

Powell said on Sunday that the charges are “a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President.”

The US attorney for Washington, DC, opened a criminal investigation into Powell on Friday over the agency’s renovation of its headquarters and whether Powell lied to Congress about the size of the project, The New York Times reported on Sunday.

Video message from Federal Reserve Chair Jerome H. Powell: https://t.co/5dfrkByGyX pic.twitter.com/O4ecNaYaGH

— Federal Reserve (@federalreserve) January 12, 2026

President Donald Trump has repeatedly attacked Powell and the Fed for refusing to grant his demands to cut interest rates.

He has long threatened legal action over renovations to the Fed building, has said he will fire Powell, and fired Fed governor Lisa Cook over accusations of mortgage fraud, which the Supreme Court later blocked.

Powell, whose term as Fed chair ends in May, said the criminal probe “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.”

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Trump has lined up a series of loyalists to potentially replace him, many of whom have said they’d cut rates.

Kevin Hassett, a key economic adviser to Trump, is widely considered to be the frontrunner to replace Powell and has said Trump’s views on interest rates will hold “no weight” on agency decisions.

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