Federal Reserve Chair Jerome Powell has revealed that he is the subject of a criminal investigation by the US Department of Justice.
The probe, which Powell called “unprecedented,” follows subpoenas served to the Fed regarding his testimony to a Senate committee on renovations.
Powell Warns Central Bank Independence at Risk
He emphasized that while no one, including the Fed chair, is above the law, the investigation appears part of broader.
Experts Raise Alarm
Former Fed Chair Janet Yellen called the investigation “extremely chilling,” warning markets to pay attention.
“You have a president pushing the Fed to cut rates to reduce federal debt payments. That’s a path toward undermining central bank independence,” Yellen told news.
Background on the Fed Renovations
The DOJ investigation relates to renovations of the Eccles and 1951 Constitution Avenue buildings,. The upgrades include health and safety improvements such as asbestos and lead removal. The Fed has said the renovations will eventually reduce costs, though Trump criticized the project’s price tag, citing a $3.1 billion.
Political Fallout and Senate Reactions
Senator Elizabeth Warren, a Democrat, accused Trump of trying to replace Powell with a compliant nominee to influence monetary policy.
Market Reactions
The investigation, combined with ongoing unrest in Iran, triggered a surge in precious metals. Gold hit a record $4,624.53 per ounce, up 2.5%, while silver rose 7.3% to $85.86 per ounce.
