Federal prosecutors have opened a criminal investigation into Federal Reserve Chairman Jerome Powell, he said on Sunday.
In a video announcing the probe, Powell said the US justice department served the agency with subpoenas and threatened a criminal indictment over testimony he gave to a Senate committee about renovations to Federal Reserve buildings.
He called the probe unprecedented and stated that it was initiated due to his refusal to lower interest rates in response to public pressure from President Donald Trump.
The Fed chair is the latest figure to come into conflict with Trump and subsequently face a criminal investigation by the US justice department.
The BBC has contacted the justice department and the White House for comment. Powell expressed that this investigation raises broader questions about the future independence of the Federal Reserve in setting interest rates based on economic evidence, versus succumbing to political pressure.
Trump responded in an NBC interview that he was unaware of the justice department’s investigation, but criticized Powell’s performance at the Fed.
The criminal probe is seen as a continuation of the ongoing tensions between Trump and Powell, who was nominated to lead the Fed by Trump himself in 2017. This situation emphasizes concerns about the independence of the Fed and the integrity of judicial proceedings amid political influence.
The investigation will be overseen by the US Attorney's Office for the District of Columbia. Senator Thom Tillis, a Republican, has voiced his opposition to any nomination for Powell’s replacement until the legal matter is resolved, indicating fears that political motives could undermine the Fed's authority.
Powell emphasized his commitment to the rule of law and indicated that the current actions should not escape scrutiny, hinting at an alarming precedent for independent economic policy in the US.
As concerns mount, the stock market and commodities have reacted, with precious metals seeing price increases reflecting investor trepidation regarding the investigation and broader economic implications.
