The Justice Department has launched a criminal investigation of Federal Reserve Chair Jerome H. Powell, the central bank said Sunday, tied to the central bank’s renovation of its headquarters along the National Mall.
Powell accused the Justice Department of using the threat of criminal prosecution to pressure the central bank to lower interest rates, describing newly issued grand jury subpoenas as an unprecedented challenge to the Fed’s independence.
“The threat of criminal charges is 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,” Powell said in the video posted to the central bank’s website Sunday.
President Donald Trump has spent the past year attacking and threatening to fire Powell for not slashing interest rates to juice the economy. The Fed has moved slowly to lower rates, as it weighs a weakening labor market with elevated inflation that has made its job more difficult.
A Justice Department official familiar with the effort confirmed the inquiry into the Federal Reserve, speaking on the condition of anonymity because of the ongoing investigation.
A Justice Department spokesperson declined to confirm the investigation, but said Attorney General Pam Bondi “has instructed her U.S. attorneys to prioritize investigating any abuses of taxpayer dollars.”
The Justice Department has targeted several of Trump’s perceived political foes with criminal investigations or charges since last year, including New York Attorney General Letitia James (D), Sen. Adam Schiff (D-California) and former FBI director James B. Comey, who was investigated, like Powell, for making allegedly false statements to Congress.
But the efforts to convict Trump’s foes have been largely unsuccessful. A federal judge last year disqualified the prosecutor Trump appointed in Virginia with directions to charge Comey and James, and also threw out their indictments. Grand juries then repeatedly refused to reindict James.
Powell said the Justice Department is seeking information about his June testimony before a Senate panel on steps the central bank took to tone down a renovation of its Washington headquarters. He described the focus on the project and his testimony as “pretexts.”
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