Federal Reserve Chair Jerome Powell said Sunday that the Department of Justice served the central bank with grand jury subpoenas on Friday, raising the prospect of a criminal indictment tied to his congressional testimony about the Fed’s building renovation project.
In a video statement released Sunday evening, Powell framed the move as political intimidation meant to weaken the Fed’s independence in setting monetary policy. The subpoenas focus on his June appearance before the Senate Banking Committee, where he addressed the Fed’s roughly $2.5 billion renovation of two historic office buildings—work President Donald Trump has publicly criticized as excessive.
Powell said he intends to continue carrying out his responsibilities despite the legal threat, arguing that “public service sometimes requires standing firm in the face of threats.”
Why it matters
The dispute over the Fed’s renovation project has become a flashpoint in a broader fight over central bank independence and interest-rate policy. Powell’s decision to respond directly marks a notable shift from the Fed’s typically restrained posture when confronted with presidential criticism.
More broadly, the episode lands amid heightened tensions over the Justice Department’s role and whether investigative decisions are being influenced by political considerations.
What to know
The Justice Department’s action centers on Powell’s June testimony about renovation costs tied to the 90-year-old Marriner S. Eccles building and an adjacent structure. The project’s estimated price tag has risen to about $2.5 billion—roughly $600 million over budget—attributed to factors including higher construction costs during the 2021–2022 inflation period, unexpected asbestos abatement, and Washington building-height limits that can require costly underground construction.
White House budget director Russ Vought has accused the Fed of pursuing an “ostentatious overhaul,” alleging features such as rooftop terrace gardens, VIP dining rooms, special elevators, water features, and premium marble. Powell disputed those claims during his testimony, saying: “There’s no VIP dining room. There’s no new marble. There are no special elevators. There are no new water features. And there’s no roof terrace gardens.” The Fed has said those elements were removed from early 2021 concepts submitted to the National Capital Planning Commission.
Administration officials have also suggested the Fed deviated from approved plans. Deputy chief of staff James Blair said the project appears misaligned with what was approved. The Fed argues it is not subject to the commission’s direction and says it is accountable to Congress through oversight by an independent inspector general—whom Powell has asked to review the renovation costs.
On Sunday, the Justice Department said Attorney General Pam Bondi “has instructed her US Attorneys to prioritize investigating any abuse of tax payer dollars,” while declining to comment on specific matters.
Powell’s full statement
“Good evening.
On Friday, the Department of Justice served the Federal Reserve with grand jury subpoenas, threatening a criminal indictment related to my testimony before the Senate Banking Committee last June. That testimony concerned in part a multi-year project to renovate historic Federal Reserve office buildings.
I have deep respect for the rule of law and for accountability in our democracy. No one—certainly not the chair of the Federal Reserve—is above the law. But this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.
This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress’s oversight role; the Fed through testimony and other public disclosures made every effort to keep Congress informed about the renovation project. Those are pretexts. 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.
This 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.
I have served at the Federal Reserve under four administrations, Republicans and Democrats alike. In every case, I have carried out my duties without political fear or favor, focused solely on our mandate of price stability and maximum employment. Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people.
Thank you.”
What happens next
Sen. Thom Tillis, a Republican member of the Senate Banking Committee, said he would oppose any future Fed nominees—including potential replacements for Powell—until “this legal matter is fully resolved.”
Powell’s term as chair is set to end in May 2026. The Supreme Court has recently indicated a president cannot remove a Fed chair simply over interest-rate disagreements, though removal “for cause,” such as misconduct, may still be legally possible. The grand jury investigation will continue under U.S. Attorney Jeanine Pirro’s office.
