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By Hugh Cameron
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Democrats from both chambers, and a select few Republicans, have criticized President Donald Trump for launching a probe into Federal Reserve Chair Jerome Powell, with some saying they will oppose the president’s nomination of his replacement until the issue is resolved.
On Sunday, Powell confirmed that the central bank received grand jury subpoenas from the Department of Justice (DOJ) on Friday, threatening an indictment related to his testimony in the summer about ongoing renovations to the Fed’s historic office buildings in Washington, D.C.
“He is abusing the law like a wannabe dictator so the Fed serves him and his billionaire friends,” posted Massachusetts Senator Elizabeth Warren, a Democrat, on Sunday. “The Senate must not move ANY Trump Fed nominee.”
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Newsweek reached out to the White House via email and the DOJ through its website for comment.
The Federal Reserve told Newsweek it had nothing to add beyond the statement from Powell, and referred the DOJ for further information on the criminal probe.
Why It Matters
Last year saw Trump routinely assail Powell, whom he nominated in 2017, over the Fed’s reluctance to slash interest rates as swiftly or as much as he desired. The president dubbed the central bank’s chief “too-late Powell,” as well as a “numbskull" and "Trump hater," while also suggesting he could remove him before his term ends and threatening legal action over what he said was Powell’s “grossly incompetent” handling of the D.C. renovations.
Each threat has aroused fears that Trump is seeking to undermine the Fed’s independence and exert greater control over interest rates. While Trump has repeatedly attacked—verbally and legally—the Fed chair, the latest development to many marks a significant escalation in this regard.
What To Know
In the video from Sunday, Powell said that the indictment threat from the DOJ related to his testimony before the Senate Banking Committee last June, part of which centered around the multi-year D.C. renovation project.
The estimated costs of the renovation have jumped from $1.9 billion in 2019 to $2.5 billion in the Fed Board’s 2025 budget, but during his testimony, Powell pushed back against allegations from Republican lawmakers that the Fed was wasting excessive funds on “lavish renovations.”
“The Federal Reserve takes seriously the responsibility to be a good steward of public resources,” the central bank wrote in July. “The project will reduce costs over time by allowing the board to consolidate most of its operations.”
However, Powell went on to say that the probe’s true purpose was a retaliation for the Fed setting interest rates “based on our best assessment of what will serve the public, rather than following the preferences of the president.”
And certain lawmakers from both parties have agreed with this interpretation of the subpoena.
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“If there were any remaining doubt whether advisers within the Trump administration are actively pushing to end the independence of the Federal Reserve, there should now be none,” North Carolina Republican Senator Thom Tillis posted to X. “It is now the independence and credibility of the Department of Justice that are in question.”
“The administration’s latest attacks on Federal Reserve Chair Jerome Powell are just the most recent example of Donald Trump’s chaos-driven approach to the economy—and once again, it’s working Americans who will pay the price,” wrote Democratic Senator and fellow Banking Committee member Mark Warner of Virginia.
“Trump wants to nominate a new Fed Chair AND push Powell off the board for good to complete his corrupt takeover of our central bank,” posted Senator Elizabeth Warren from Massachusetts, also a Democrat.
Trump is soon set to nominate a replacement for Powell, whose tenure ends in May, but Tillis and Warren have said they will oppose whomever he nominates in light of the recent threats against the incumbent Fed chair.
“I will oppose the confirmation of any nominee for the Fed—including the upcoming Fed chair vacancy—until this legal matter is fully resolved,” said Tillis on Sunday.
What People Are Saying
Federal Reserve Chair Jerome Powell, in a statement posted on Sunday, said: “This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress' 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.”
Todd Belt, director of the Political Management Program at George Washington University, told Newsweek: "It seems that this is political retribution for Powell’s reticence to slash interest rates as desired by Trump."
"This is absolutely the most serious threat to the Fed’s independence that we have seen from any president," he added. "The issue of the renovations is a convenient excuse, just as the issue of home mortgages was for Letitia James and others."
Political commentator and former White House communications director Anthony Scaramucci, via X: “So future potential Fed chairs just remember if you don’t do what Trump wants, he will criminally prosecute you. The Fed received grand jury subpoenas from the Justice Department on Friday that threaten a criminal indictment relating to Chair Powell.”
Former Illinois Republican Representative Adam Kinzinger, in a video posted to X: “There’s only one reason to do this, and Jerome Powell gave a statement and made this very clear: it’s not because Donald Trump cares about the rule of law or something. I mean c’mon. They’re going after him to intimidate him, because they want him to lower interest rates, even though the chair of the Federal Reserve and the Federal Reserve Board, their job is to stabilize monetary policy and try to increase employment. So they are the smart people, they know what to do. You can’t just cut interest rates, particularly when inflation is out of control.”
Democratic Representative Melanie Stansbury, from New Mexico, via X: “Donald Trump is now using DOJ to threaten the Fed chair. Threats to an independent Fed impact market stability, inflation, costs, your retirement, and employment—things Americans cannot afford. This is clearly an abuse of power.”
What Happens Next
In an interview with NBC News, Trump said he had no knowledge of the Justice Department’s probe into the Fed, but said of Powell, “he’s certainly not very good at the Fed, and he's not very good at building buildings.”
“I wouldn't even think of doing it that way,” Trump continued. “What should pressure him is the fact that rates are far too high."
The Fed cut rates three times during its final meetings of 2025, but is expected to hold these steady at its next meeting in late January.
Powell is due to step down from the Fed chair post in May, though his separate, 14-year term as a governor means he may continue to serve on the central bank board following this departure.
Update 1/12/26, 9:41 a.m. ET: This article was updated with comment from Todd Belt.
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