Federal prosecutors have opened a criminal investigation into Federal Reserve Chair Jerome Powell, focusing on the costly renovation of the central bank’s Washington headquarters and whether Powell misled Congress about the scope of the project, The New York Times reported. Prosecutors in the U.S. Attorney’s Office for the District of Columbia, with approval from Trump-appointed U.S. Attorney Jeanine Pirro, are examining Powell’s public statements and spending records related to the renovation of the Federal Reserve’s Marriner S. Eccles Building and a nearby structure.
The sprawling $2.5 billion renovation, begun in 2022 and slated for completion in 2027, has drawn intense scrutiny from the White House and Republican allies, who argue the cost overruns and planning discrepancies reflect mismanagement. Federal officials say the increases stem from inflation, supply chain pressures, and unforeseen issues such as asbestos and soil contamination.
Powell, in a video released shortly before the Times report, forcefully denied the investigation was about renovation misstatements. He said it was instead retaliation for his resistance to White House pressure to sharply cut U.S. interest rates.
“This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings,” Powell said, adding that the Fed had “made every effort to keep Congress informed about the renovation project.”
Watch:
Powell characterized the threat of criminal charges as a broader challenge to the Federal Reserve’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,” he said in the statement. “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.”
The focus on Powell’s testimony stems from his June appearance before the Senate Banking Committee, when he addressed questions about whether luxury amenities—such as VIP dining spaces, special elevators, marble finishes, and rooftop gardens included in early planning documents—made it into final renovation plans. Powell testified they had not; critics argue internal documents contradict that characterization.
President Trump’s reaction amplified the already heightened tensions. Trump, who has repeatedly criticized Powell for not cutting interest rates as aggressively as he prefers, denied having direct knowledge of the investigation, but attacked Powell’s performance. In a brief television interview, the president said:
“I don’t know anything about it, but he’s certainly not very good at the Fed, and he’s not very good at building buildings,” adding that Powell “hurt a lot of people” by keeping rates too high.
Trump has in recent months publicly disparaged Powell, branding him with nicknames like “Too Late Powell” for perceived slowness in reducing interest rates and threatening legal action over the renovation costs. In late December, he said he was contemplating a lawsuit against Powell for “gross incompetence” regarding the renovation, claiming the project would cost “more than $4 billion — $4 billion!” and blasting it as “the highest price of construction per square foot in the history of the world.”
Although Trump suggested suing or firing Powell, legal experts note that the president cannot remove a Fed chair without cause under current law, and Powell’s term as chair expires in May 2026. Trump is widely expected to announce his successor around that time if he chooses not to renominate Powell.
The investigation’s escalation has drawn concern from lawmakers on both sides of the aisle, with critics warning it could undermine the Federal Reserve’s long-held independence and rattle financial markets.
President Donald Trump will interview Rick Rieder, BlackRock’s chief investment officer of global fixed income, this week to possibly be the next chairman of the Federal Reserve, administration sources told FOX Business.
The sources said the interview with Rieder will take place on Thursday at the White House. It will include Trump, Chief of Staff Susie Wiles, Treasury Secretary Scott Bessent, and Deputy Chief of Staff Dan Scavino.
This will be the fourth and last interview with a candidate to replace Federal Reserve Chairman Jerome Powell, the sources said. Powell’s term as chairman ends on May 15. He was nominated by Trump to lead the Fed in 2017 and confirmed in 2018.
