Trump team ramps up attack on Fed's Powell with criminal indictment threat

• The Justice Department issued grand jury subpoenas to the Fed related to Powell's June 2025 testimony about a $2.5 billion headquarters renovation project that the White House criticized as costly
• Powell's term as Fed chair ends in May, but analysts suggest the threatened indictment may increase chances he stays on in defiance; Trump separately faces a Supreme Court case over his attempt to fire Fed Governor Lisa Cook
• Senator Tillis, a member of the Senate Banking Committee, said the threatened indictment puts DOJ's 'independence and credibility' in question and vowed to block all Trump Fed nominees until resolved

Trump Administration Threatens Criminal Indictment Against Fed Chair Powell

The Trump administration has dramatically escalated its conflict with the Federal Reserve by threatening to criminally indict Chair Jerome Powell over testimony regarding a $2.5 billion building renovation project. Powell characterized the threat as a "pretext" for the administration to gain influence over monetary policy and interest rates.

Key Developments

The Justice Department served the Fed with grand jury subpoenas Friday related to Powell's June 2025 congressional testimony about cost overruns on the Fed's headquarters renovation. Powell stated the action is "unprecedented" and represents broader White House pressure for lower interest rates rather than genuine concern about his testimony.

Trump denied knowledge of the DOJ action, telling NBC News he knew nothing about it while criticizing Powell's performance. The DOJ declined to comment specifically but said it prioritizes investigating abuse of taxpayer dollars.

Political and Market Impact

Republican Senator Thom Tillis, a Banking Committee member, announced he would oppose all Trump Fed nominees "until this legal matter is fully resolved," citing concerns about DOJ independence. Powell's term as chair expires in May, though analysts suggest the indictment threat may increase chances he stays on in defiance.

U.S. equity futures fell approximately 0.5% Monday, while the dollar weakened. Treasury yields remained largely unchanged.

Broader Implications

The confrontation threatens Fed independence—a cornerstone of effective monetary policy. Fed historian Peter Conti-Brown called the inquiry "a low point in Trump's presidency and a low point in the history of central banking in America." A Supreme Court case regarding Trump's attempt to fire Fed Governor Lisa Cook is pending.