<\/p>\n
The Department of Justice has opened a criminal investigation into Jerome Powell and the Federal Reserve<\/a>, a significant escalation in Donald Trump\u2019s extraordinary attack on the US central bank.<\/p>\n Powell said the Department of Justice had served the Fed with grand jury subpoenas on Friday, threatening a criminal indictment related to his testimony before the Senate banking committee in June last year, regarding renovations to the Fed\u2019s historic office buildings in Washington DC.<\/p>\n The US attorney\u2019s office in the District of Columbia has opened a criminal investigation into Powell over the project, and whether Powell lied to Congress about its scope, the New York Times reported<\/a> on Sunday.<\/p>\n Allies of Trump spent months last year accusing the Fed<\/a> of mishandling the multibillion-dollar renovations. Trump had repeatedly threatened legal action.<\/p>\n In a blistering statement<\/a> on Sunday, Powell argued he had been threatened with criminal charges because the Fed had set interest rates \u201cbased on our best assessment of what will serve the public, rather than following the preferences of the president\u201d.<\/p>\n Trump has repeatedly blasted Powell and the Fed for declining to bow to his demands for rapid rate cuts, and launched an aggressive campaign to curtail the central bank\u2019s longstanding independence \u2013 and exert greater control over its decisions.<\/p>\n The Trump administration has already installed a close ally of the president<\/a> onto the Fed\u2019s powerful board of governors, and sought to fire Lisa Cook<\/a>, a governor appointed by Joe Biden, over unconfirmed allegations of mortgage fraud.<\/p>\n The US attorney\u2019s office inquiry, which includes an analysis of Powell\u2019s public statements and an examination of spending records, was approved in November by Attorney Jeanine Pirro, the NYT reported,<\/strong> citing officials briefed on the situation.<\/p>\n In a statement on Sunday evening, Powell insisted the legal threat was \u201cnot about\u201d his testimony last summer, or congressional oversight of the Fed. \u201cThis is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions \u2014 or whether instead monetary policy will be directed by political pressure or intimidation,\u201d he said.<\/p>\n \u201cI have served at the Federal Reserve under four administrations, Republicans and Democrats alike,\u201d Powell added. \u201cIn every case, I have carried out my duties without political fear or favor, focused solely on our mandate of price stability and maximum employment.<\/p>\n \u201cPublic 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.\u201d<\/p>\n Contacted for comment, the White House deferred to the Department of Justice, which did not immediately respond to a request for comment.<\/p>\n Powell, initially appointed by Trump, and reappointed by Biden, has chaired the Fed since 2018. His term as chairman is due to expire in May \u2013 at which time Trump\u2019s chosen successor can take his place \u2013 although Powell can remain on the Fed\u2019s board of governors until 2028.<\/p>\n As US inflation surged to its highest level in a generation after the pandemic, the Fed scrambled to raise interest rates in 2022 and 2023 \u2013 ultimately lifting them to their highest level in two decades \u2013 in a bid to cool the world\u2019s largest economy.<\/p>\n