Fed has not yet complied with subpoenas as Powell probe continues: Source

• The investigation is being conducted by U.S. Attorney Jeanine Pirro for the District of Columbia, with subpoenas demanding Fed documents but no clear compliance deadline
• Powell stated the investigation stems from President Trump's frustration over the Fed's refusal to cut interest rates as quickly as the president wanted in the previous year
• Powell characterized the criminal charges threat as 'a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President'

Summary

Key Development:

The Federal Reserve has not yet complied with grand jury subpoenas issued in connection with a criminal investigation of Fed Chair Jerome Powell by federal prosecutors in Washington, D.C., according to a source familiar with the matter. The probe remains ongoing, with no clear deadline established for document submission.

Background:

• Powell publicly disclosed the criminal investigation on January 11, 2025
• The investigation is being conducted by U.S. Attorney Jeanine Pirro's office in the District of Columbia
• The probe relates to Powell's testimony before the Senate Banking Committee in June 2024 regarding the central bank's interest rate policies

Context:

Powell attributed the investigation to frustration from President Trump over the Federal Reserve's refusal to cut interest rates as quickly or aggressively as the president desired. Powell defended the Fed's independence, stating that "the threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President."

Market Impact:

The announcement came hours before the Fed's decision to hold interest rates steady. When questioned about the subpoenas during a press conference, Powell declined to comment, saying "I have nothing for you on that today."

Status:

Both the Federal Reserve and Department of Justice have been contacted for comment but have not responded. The investigation's timeline and specific allegations remain unclear.