Federal Reserve Chair Jerome Powell on Sunday delivered an unusually direct rebuke of the administration of President Donald Trump, accusing it of trying to intimidate the independent central bank in an effort to force him from office.
The comments came after the Justice Department launched a criminal investigation into Powell and issued grand jury subpoenas tied to his June testimony about renovations at the Federal Reserve headquarters.
For months, Powell has defended the independence of the central bank while declining to address Trump attacks head on. That restraint ended with a video statement released by the Fed, in which Powell described the investigation as a pretext and warned it could undermine the institution ability to act in the public interest.
“This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings,” Powell said. “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.”
The investigation represents a sharp escalation in a long running campaign by Trump to exert greater influence over monetary policy.
The Federal Reserve was established by Congress to operate independently from direct White House control, a structure many economists view as essential to keeping inflation in check.
Trump has repeatedly urged the Fed to slash its key interest rate, arguing aggressive cuts would accelerate economic growth.
Powell and other policymakers have lowered rates gradually to support the job market, but have resisted deeper cuts out of concern that excessively easy policy could fuel inflation.
Powell said he intends to remain in his post despite the investigation, framing the episode as a test of institutional independence rather than a personal dispute.
Financial markets and economists alike are watching closely, warning that pressure on the Fed could have lasting consequences for economic stability.
