Former Fed chairs slam ‘attacks’ on Jerome Powell 

Federal Reserve Chair Jerome Powell said the central bank is facing a "new threat" from the Trump administration following grand jury subpoenas sent last week by the U.S. Department of Justice (DOJ).

In a Jan. 11 video statement, Powell, who has avoided publicly criticizing the administration since President Donald Trump returned to office last January, questioned the intent of the DOJ's investigation and raised concerns about the Fed's independence.

Former Fed chairs and U.S. Department of Treasury secretaries, as well as sitting members of Congress, have also raised concerns about the nature of the investigation.

Renovation testimony a 'pretext'

On Jan. 9, the DOJ served the Fed with subpoenas related to Powell's testimony before the Senate Banking Committee in June 2025, the Fed chair explained. He indicated that the DOJ is interested in the parts of his testimony that addressed plans to renovate the Fed's headquarters.

But Powell doesn't believe his testimony or the renovation plans are the real drivers of the investigation, which he described as a "new threat." Those, he said, "are pretexts."

"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," he alleged.

The investigation could determine whether the Fed continues to operate independently, "or whether instead monetary policy will be directed by political pressure or intimidation."

Powell concluded by saying that he has thus far "carried out my duties without political fear or favor" and intends to continue "standing firm in the face of threats."

Trump, however, denied involvement in the probe: "I don't know anything about it," he told NBC News on Jan. 11.

White House press secretary Karoline Leavitt also told reporters on Jan. 12 that Trump did not direct the DOJ to open its investigation.

Real Estate News has reached out to the DOJ for comment.

A strained relationship, claims of fraud

Trump repeatedly called on Powell to resign — and occasionally threatened to fire him — last year over the Fed's approach to short-term interest rates, which it did not cut until September.

After a Senate Banking Committee hearing in June, Federal Housing Finance Agency Director Bill Pulte suggested Powell's testimony on the Fed's renovation plans was "deceptive" and "worthy" of termination for cause, with Trump later saying "it's possible there's fraud involved" in the renovation project.

The renovation, which was first approved in 2017, has seen its budget climb over time due to material and labor cost increases, the discovery of "more asbestos than anticipated" and other factors, the Fed has explained.

Past Fed chairs criticize 'prosecutorial attacks'

A group of former Fed chairs, Treasury secretaries and White House economic advisors have raised concerns about the DOJ's investigation and what it could mean for the central bank's ability to operate without political influence.

The Fed's independence — and the public's belief in that independence — are critical to the stability of the wider economy, they said in a joint statement.

The DOJ's investigation "is an unprecedented attempt to use prosecutorial attacks to undermine that independence," the statement said.

"This is how monetary policy is made in emerging markets with weak institutions, with highly negative consequences for inflation and the functioning of their economies more broadly," the statement continued. "It has no place in the United States whose greatest strength is the rule of law, which is at the foundation of our economic success."

Former Fed Chairs Ben Bernanke, Alan Greenspan and Janet Yellen were among the signatories.

Senators to oppose future Fed nominees

Politicians on both sides of the aisle also raised concerns about the DOJ investigation, with some suggesting they will move to block Trump's future Fed nominees. Trump has indicated that he may announce his pick to replace Powell later this month.

Democratic Senator Elizabeth Warren of Massachusetts, a ranking member on the Senate Banking Committee, alleged the president "is abusing the authorities of the Department of Justice" so that the Fed "serves his interests" and suggested the committee "should not move forward with any Trump nominee for the Fed, including Fed Chair."

Senator Thom Tillis of North Carolina, a member of Trump's party who also serves on the Senate Banking Committee, signaled his alignment with Warren on future Fed leadership changes.

"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.

"I will oppose the confirmation of any nominee for the Fed — including the upcoming Fed Chair vacancy — until this legal matter is fully resolved," Tillis added.