WASHINGTON (AP) — The chairman of the Federal Reserve Jerome Powell said Sunday the Justice Department served the central bank with a subpoena and threatened criminal charges over his testimony about the Fed building renovations.
The move represents an unprecedented escalation in President Donald Trump’s fight with the independent Fed agency, which he has repeatedly attacked for not cutting its key interest rate as quickly as Trump prefers. The subpoena relates to his testimony before the Senate Banking Committee in June, Powell said, regarding the $2.5 billion renovation of two office buildings, a project that Trump criticized as excessive this summer.
In a video statement, Powell said the threat of criminal charges was a “pretext” for undermining Fed independence when it comes to setting interest rates.
“The question is whether the Fed will be able to continue to set interest rates based on evidence and economic conditions — or whether monetary policy will be driven by political pressure or intimidation,” Powell said.
The Justice Department said in a statement Sunday that it could not comment on any specific case, but added that Attorney General Pam Bondi had “directed her U.S. attorneys to prioritize the investigation of any misuse of taxpayer dollars.”
A spokeswoman for U.S. Attorney Jeanine Pirro’s office did not immediately return a text message and phone call seeking comment Sunday.
The potential impeachment has already raised concerns among one Republican senator, who said he would oppose any future central bank nominee, including any replacement for Powell, until “this legal matter is fully resolved.”
“If there was any doubt that advisers in the Trump administration were actively pushing to end the Federal Reserve’s independence, there shouldn’t be any now,” said Sen. Thom Tillis of North Carolina, who sits on the banking committee that oversees Fed nominations. “What’s at stake now is the independence and credibility of the Justice Department.”
— By Christopher Rugaber AP Economics Writer
Associated Press writers Seung Min Kim, Eric Tucker and Alanna Durkin Richer contributed to this report.
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