The United States government has escalated its dispute with Federal Reserve Chair Jerome Powell by threatening him with a criminal indictment, raising concerns about the independence of the central bank. According to Reuters, the Department of Justice (DOJ) issued grand jury subpoenas and warned that Powell could face charges related to his testimony before Congress regarding a Federal Reserve building renovation project, a development Powell himself described as a “pretext” to pressure the Fed on interest rate policy.
Powell said the threat of prosecution was aimed at coercing the central bank into cutting interest rates — a demand repeatedly voiced by President Donald Trump and his advisers. Trump’s administration has publicly criticised the Fed’s policy stance and sought greater influence over monetary decisions. Republican Senator Thom Tillis criticised the move, warning it could undermine the Justice Department’s independence and disrupt the longstanding principle of central bank autonomy.
The situation has drawn market attention, with analysts noting potential implications for financial stability and confidence in U.S. monetary policy. While no formal charges have yet been filed, the unprecedented nature of the threat against a sitting Fed chair illustrates rising tensions between the White House and the Federal Reserve over economic strategy.