Powell said the Department of Justice served the Federal Reserve with grand jury subpoenas threatening a criminal indictment related to testimony he gave to the Senate Banking Committee last June about the renovation of Federal Reserve buildings in Washington, D.C. The project, involving historic office space upgrades, has drawn intense scrutiny over cost and scope.

In a public statement, Powell described the action as “unprecedented”, asserting that the investigation was not genuinely about the renovation or his testimony, but rather a consequence of larger political disputes. “This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings,” he said. Powell argued the threat of charges stemmed from his resistance to political pressure, particularly from President Donald Trump, to lower interest rates more aggressively than the Fed’s economic mandate warranted.

Powell’s comments reflect alarm within financial circles about potential interference in the Fed’s longstanding independence. He insisted that he respects the rule of law but that the move should be seen in the context of ongoing pressure from the administration.

In response, Trump, who has previously criticized Powell’s rate decisions and publicly sparred with him over the renovations, denied direct knowledge of the investigation in an interview but reiterated his broader criticisms of Powell’s performance and the cost of the central bank’s building project.

The BBC has reported on the criminal probe and has sought comment from both the Justice Department and the White House as developments continue to unfold.