Trump administration opens investigation against Fed president

“On Friday, the Department of Justice served the Federal Reserve (Fed) with grand jury subpoenas threatening criminal charges related to my testimony before the Senate Banking Committee last June,” Powell said in a statement and video.

“The testimony concerned, in part, a multi-year project to renovate the Fed’s historic buildings,” added the head of the central bank, who abandoned the usual cautious tone in his speeches and denounced being a victim of “intimidation” by the Trump administration.

Powell believes that both his testimony and the Fed headquarters overhaul are “pretexts” and that the threat of criminal charges stems from the fact that the central bank is acting based on its economic assessments “rather than following the U.S. president’s preferences.”

US President Donald Trump has been harshly criticizing Powell for months for not cutting interest rates enough and advocates that his successor, who is expected to take office in May, adopt a monetary policy in line with his views.

“This is a question of whether the Fed will be able to continue setting interest rates based on evidence and economic conditions, or whether monetary policy will instead be guided by political pressure or intimidation,” Powell said in his statement.

The Fed chairman denounced this as “an unprecedented action that must be seen in the broader context of the Trump administration’s ongoing threats and pressure” and reaffirmed his commitment to doing his duty “without fear or political favor.”

Trump and other senior administration officials have criticized the Fed headquarters renovation, and last summer the president complained that the total cost had ballooned from the already known figure of about $2.5 billion, $700 million more than the initial plan, to $3.1 billion, a claim that Powell refuted.

In his efforts to exert greater control over the institution responsible for price stability and full employment in the US, the president attempted to remove Lisa Cook, a member of the Fed Board of Governors, accusing her of mortgage fraud.