Powell Reveals Fed Receives Subpoena from DOJ, Trump Denies Involvement in Interest Rates

Chairman of the US Federal Reserve (Fed) Jerome Powell stated that the US Department of Justice (DOJ) has issued a grand jury subpoena to the Fed and threatened potential criminal prosecution. This is a rare move, raising concerns about the independence of the Fed and quickly becoming a focal point for macro investors. In a video posted on Sunday, Mr. Powell said that federal prosecutors are investigating his testimony before the Senate in June regarding the $2.5 billion Fed headquarters renovation project in Washington. According to him, this legal move appears to be a “retaliation” because the Fed kept interest rates higher than what President Donald Trump desired. “Threatening criminal prosecution is a consequence of the Federal Reserve setting interest rates based on the best assessment for the public interest, rather than following the wishes of the President,” Mr. Powell emphasized. Trump Criticizes Powell but Slightly Eases Investigation In an interview with NBC News, President Trump said he was unaware of the investigation and publicly criticized Powell’s leadership capabilities. “He’s not good at running the Fed and not good at building projects,” Trump said, referring to the headquarters renovation project. When asked if the subpoenas are aimed at pressuring Powell to lower interest rates, Trump denied: “No. I don’t even think in that direction. This has nothing to do with interest rates.” Senate Divided, Warren Accuses Abuse of Power The investigation follows months of political controversy surrounding the Fed headquarters renovation project. In July 2025, Representative Anna Paulina Luna submitted a petition to the DOJ, requesting an investigation into Mr. Powell for possible perjury and false statements during a Senate Banking Committee hearing. In Congress, Republican Senator Thom Tillis announced he would block future Fed nominees until the matter is clarified, warning that this confrontation raises questions about the independence of the DOJ itself. Conversely, Democratic Senator Elizabeth Warren accused President Trump of “abusing the Department of Justice’s power like an aspiring dictator to force the Fed to serve his interests and those of close billionaires.” Market Watches Systemic Risks Markets view this as an emerging institutional risk. Traders are closely monitoring the US dollar, interest rate expectations, and volatility indicators — factors that often directly impact liquidity, leverage, and positions in the cryptocurrency market. Powell’s term as Fed Chair will end in May 2026, but he may remain on the Board of Governors until 2028. This makes the choice of the next Fed Chair by President Trump a significant “catalyst” for interest rate policies, the US dollar, and the macro outlook for Bitcoin in the near future. In summary, tensions between the White House, DOJ, and the Fed are bringing the issue of the US central bank’s independence back into focus. Amid escalating political and legal tensions, global investors should prepare for more significant volatility across financial markets, from bonds and forex to cryptocurrencies.