Updated by Faith Barbara N Ruhinda at 1050 EAT on Monday 12 January 2026

Federal prosecutors have opened a criminal investigation into Federal Reserve Chair Jerome Powell, he said on Sunday.

In a video statement announcing the probe, Powell said the U.S. Justice Department had served the Federal Reserve with subpoenas and threatened a criminal indictment over testimony he gave to a Senate committee regarding renovations to Federal Reserve buildings.

Powell described the investigation as “unprecedented” and said he believed it was initiated after he angered former President Donald Trump by refusing to lower interest rates despite repeated public pressure.

Powell is the latest high-profile figure to clash with Trump and subsequently face a criminal investigation by the Justice Department.

Federal prosecutors have opened a criminal investigation into Federal Reserve Chair Jerome Powell, he said on Sunday.

In a video announcing the probe, Powell said the US Justice Department had served the Federal Reserve with subpoenas and threatened a criminal indictment over testimony he gave to a Senate committee concerning renovations to Federal Reserve buildings.

Powell described the investigation as “unprecedented” and said he believed it was triggered by former President Donald Trump’s anger over his refusal to lower interest rates, despite repeated public pressure.

The Fed chair is the latest figure to clash with Trump and subsequently face a criminal investigation by the Justice Department.

“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,” Powell said.

“I have deep respect for the rule of law and for accountability in our democracy. No one — certainly not the chair of the Federal Reserve — is above the law, but this unprecedented action should be viewed in the broader context of the administration’s threats and ongoing pressure,” he added.

Trump said in an interview with NBC News on Sunday that he had no knowledge of any Justice Department investigation into Powell.

“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,” Trump said.

The probe, which prosecutors have not confirmed publicly, would mark a further escalation in Trump’s long-running dispute with Powell, whom he nominated as Fed chair in 2017.

Trump has repeatedly threatened to remove Powell, whom he has criticised for not cutting interest rates as quickly as he wanted. In the second half of 2025, the Federal Reserve cut interest rates three times.

The president has consistently blamed his predecessor, Joe Biden, and high interest rates for inflation and rising costs in the US.

Critics have warned that Trump’s pressure to oust the Fed chair risks undermining the central bank’s independence to set monetary policy free from political influence.

Republican Senator Thom Tillis of North Carolina, a member of the Senate Banking Committee, said he would oppose any nominee put forward by Trump to replace Powell — as well as any other Federal Reserve Board nominee — until the legal matter is resolved.

“If there were any remaining doubt whether advisers within the Trump administration are actively pushing to end the independence of the Federal Reserve, there should now be none,” Tillis said in a statement.

“It is now the independence and credibility of the Department of Justice that are in question,” he added.

Democratic Senator Elizabeth Warren said she believed Trump was seeking to force Powell off the Fed board permanently and “install another sock puppet to complete his corrupt takeover of America’s central bank”.

“This committee and the Senate should not move forward with any Trump nominee for the Fed, including the Fed chair,” Warren said.

The investigation into Powell will be overseen by the US Attorney’s Office for the District of Columbia, according to the New York Times, which first reported the probe.

Trump previously targeted Lisa Cook, a governor at the US central bank, attempting to remove her over alleged mortgage fraud. A federal court blocked the move, and the case is set to be heard by the Supreme Court later this month, the BBC reported.

Criminal charges brought by Trump’s Justice Department against other political adversaries — including New York Attorney General Letitia James, who filed a civil fraud case against Trump in 2024, and former FBI Director James Comey — were also dismissed by a court.

Comey was accused of making false statements and obstructing justice. He was fired by Trump during his first term after leading the investigation into Russian interference in the 2016 presidential election, which Trump won over Hillary Clinton.

Both Comey and James have maintained their innocence and said the prosecutions were politically motivated.

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