Several former leaders of the US central bank have spoken out against a criminal investigation into current Federal Reserve chair Jerome Powell. They say the move threatens the independence of the Fed and could harm the country’s economy.
Janet Yellen, Ben Bernanke, and Alan Greenspan joined ten other former senior officials in signing a public statement backing Powell. The group includes people appointed by both Democratic and Republican presidents, which shows how rare this level of agreement is.
They warned that the strength of the US economy depends on the Federal Reserve being free from political pressure. They also said public trust in the central bank matters just as much as its legal independence.
Why Former Fed Chiefs Are Speaking Out
In their statement, the former Fed leaders said the Justice Department’s investigation has no place in a country built on the rule of law. They argued that using legal threats to influence monetary policy is dangerous.
They compared the situation to countries with weak institutions, where political pressure often leads to high inflation and unstable economies. In their view, this kind of interference could damage the US financial system if it becomes normal.
What Triggered the Investigation
The statement came one day after Powell revealed that the Justice Department had issued subpoenas to the Federal Reserve. Prosecutors also warned that he could face criminal charges over comments he made to a Senate committee.
Those comments were about the renovation of two Federal Reserve buildings in Washington. Powell described the investigation as unprecedented and said it caught him by surprise.
Trump’s Role in the Dispute
Powell said he believes the probe is linked to President Donald Trump’s anger over interest rates. Trump has often criticized the Fed for not cutting rates fast enough.
Although the central bank lowered its key interest rate three times in the second half of 2025, Trump has said the cuts were not deep enough. The rate now sits between 3.50 and 3.75 percent, which is the lowest level in three years.
Powell also said the investigation should be viewed in the context of ongoing political pressure from the administration.
Why Fed Independence Matters
The Federal Reserve sets interest rates based on economic data, not politics. This helps keep inflation under control and supports steady growth.
Former Fed leaders fear that if politicians can use criminal probes to influence the central bank, it could shake confidence in the US economy. Markets rely on the idea that the Fed can make decisions without fear or favor.
