New York, January 13: Every living former head of the Federal Reserve has issued a joint statement condemning a Department of Justice (DOJ) investigation into current Chair Jerome Powell. The inquiry, which surfaced late Sunday, involves grand jury subpoenas regarding Powell’s June 2025 congressional testimony. The move marks a significant escalation in the ongoing tension between the central bank and the Trump administration, which has frequently criticized the Fed for its refusal to implement rapid interest rate cuts.

Who is Jerome Powell?

Jerome Powell, 72, is the 16th Chair of the Federal Reserve and has led the U.S. central bank since 2018. Originally an investment banker and lawyer, Powell was first appointed as a Fed Governor by President Barack Obama in 2012. He was later elevated to the chairmanship by President Donald Trump during his first term and reappointed by President Joe Biden in 2022. As chair, Powell is the public face of U.S. monetary policy, overseeing the committee that sets interest rates to manage inflation and employment. His current term as chair is set to expire in May 2026, though his seat on the Fed’s Board of Governors lasts until 2028. Stocks Fall on Wall Street After Federal Reserve Chair Jerome Powell Says ‘Donald Trump Trying to Undermine the Fed’s Independence’.

Why the Justice Department is Investigating

The DOJ investigation focuses on whether Powell misled Congress during testimony regarding a $2.5 billion renovation of the Federal Reserve’s headquarters in Washington, D.C. Allies of the administration have alleged the project was mismanaged and that Powell’s testimony about the scope of the work—which he claimed involved no "VIP dining rooms" or "special elevators"—was inaccurate.

U.S. Attorney Jeanine Pirro approved the inquiry, which includes an examination of spending records and Powell’s public statements. While the administration describes the probe as a matter of fiscal accountability, Powell dismissed it as a "pretext" for political intimidation, arguing that the threat of criminal charges is a response to the Fed’s refusal to follow presidential preferences on interest rates.

Why Trump is Attacking Jerome Powell

President Trump’s friction with Powell stems from a fundamental disagreement over the pace of interest rate cuts. Throughout 2025 and into 2026, the President has publicly lambasted Powell as a "stubborn moron" and "incompetent," accusing the Fed chair of sabotaging the economy by keeping borrowing costs too high. Trump has consistently argued that aggressive rate cuts are necessary to "juice" economic growth and offset the impact of his administration's sweeping tariffs. Powell Terms US Justice Dept Action Unprecedented, Reaffirms Fed's Policy Independence.

By leveraging the DOJ to investigate the headquarters renovation, critics argue the President is attempting to establish "for cause" grounds to fire Powell before his term ends—a move that would allow the administration to install a more compliant successor.

Global and Domestic Backlash

The investigation has triggered a wave of support for Powell. Thirteen former senior Fed officials—including Alan Greenspan, Ben Bernanke, and Janet Yellen—signed a statement warning that using prosecutorial attacks to influence monetary policy is a hallmark of "emerging markets with weak institutions." The backlash has also extended to Capitol Hill. Republican Senator Thom Tillis labeled the investigation a "huge mistake" and vowed to oppose the confirmation of any successor to Powell until the legal matter is resolved.

Market Impact and Context

Financial markets reacted sharply to the news, with gold and silver prices surging to record highs as investors sought "safe haven" assets. National Economic Council Director Kevin Hassett is currently considered the front-runner to succeed Powell when his chairmanship ends in May. Analysts suggest the investigation may complicate the transition and further volatile the relationship between the White House and the nation's top financial regulator.

TruLY Score by LatestLY
Rating:3

TruLY Score 3 – Believable; Needs Further Research | On a Trust Scale of 0-5 this article has scored 3 on LatestLY, this article appears believable but may need additional verification. It is based on reporting from news websites or verified journalists (theguardian), but lacks supporting official confirmation. Readers are advised to treat the information as credible but continue to follow up for updates or confirmations

(The above story first appeared on LatestLY on Jan 13, 2026 07:31 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).