Trump Presidency
DOJ Subpoenas Federal Reserve in Escalating Pressure Campaign
Jerome Powell, however, has framed the move as something far more consequential than a dispute over construction overruns—warning that it represents a direct threat to the independence of U.S. monetary policy.
The U.S. Justice Department (DOJ) has subpoenaed the Federal Reserve, marking a dramatic escalation in President Donald Trump’s long-running pressure campaign against the central bank and its chairman, Jerome Powell. The subpoenas, confirmed by Powell in a video statement, are tied to a criminal investigation into his testimony before Congress regarding the costly renovation of the Fed’s Washington headquarters.
Jerome Powell, however, has framed the move as something far more consequential than a dispute over construction overruns—warning that it represents a direct threat to the independence of U.S. monetary policy.
What the DOJ subpoenas are about
According to Jerome Powell, the Federal Reserve received grand jury subpoenas on Friday related to his June testimony before the Senate Banking Committee. That hearing focused on ballooning costs for the Fed’s headquarters renovation, which have risen from $1.9 billion to $2.5 billion.
While Powell acknowledged that scrutiny of the project is legitimate, he rejected allegations of wrongdoing and said the criminal probe is being used as leverage.
“This is not about the renovation,” Powell said. “The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what serves the public, rather than following the preferences of the President.”
Trump’s rate pressure and public denials
President Trump has repeatedly demanded much deeper interest rate cuts, arguing that current rates are hurting economic growth. Although the Fed has lowered rates at its last three meetings, Trump has said the moves do not go far enough.
The president has also openly criticized Jerome Powell’s leadership and floated the idea of legal action, calling the Fed chair “incompetent.” Jerome Powell’s term as chairman ends in May, though his seat on the Board of Governors runs until 2028.
Trump has denied any involvement in the DOJ’s investigation. “I don’t know anything about it,” he told NBC News, insisting the matter has nothing to do with interest rates.
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Political backlash and constitutional concerns
The subpoenas have triggered swift backlash on Capitol Hill. Senator Thom Tillis, a Republican member of the Senate Banking Committee, said he would block confirmation of any Federal Reserve nominees until the legal matter is resolved. Senator Elizabeth Warren accused Trump of abusing the Justice Department to intimidate the Fed, warning that the move undermines democratic institutions.
Legal experts note that the Federal Reserve is intentionally insulated from political pressure so it can make unpopular but necessary decisions—such as raising rates to fight inflation.
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. It is now the independence and credibility of the Department of Justice that are in question.
— Senator Thom Tillis (@SenThomTillis) January 12, 2026
Why this fight matters
The Federal Reserve is not funded by taxpayer dollars, relying instead on fees and investment income. Still, the DOJ has said it is prioritizing investigations into potential misuse of public funds.
Jerome Powell has emphasized that no one is above the law, but warned that using criminal investigations to influence monetary policy would set a dangerous precedent.
“This is about whether monetary policy will be driven by evidence and economic conditions—or by political intimidation,” Powell said.
As legal and political tensions rise, the subpoenas mark one of the most serious challenges to Federal Reserve independence in modern history, with implications that could extend far beyond interest rates.
