Federal Reserve Chair Jerome Powell released a video statement Sunday addressing what he described as an unprecedented threat: the Department of Justice had warned the central bank of potential "criminal indictment" over his congressional testimony regarding building renovation costs.
This Is Really About Monetary Policy Control
The confrontation represents a serious escalation in the ongoing battle between President Donald Trump and the Fed. For months, Trump has hammered the central bank for not cutting interest rates more aggressively and repeatedly demanded Powell's removal, chipping away at the institution's traditional independence.
Powell didn't mince words in his response. The Fed's $2.5 billion headquarters renovation and the grand jury subpoenas investigating it? Those are just "pretexts," he argued. The real fight is about who controls U.S. monetary policy.
"I have deep respect for the rule of law and for accountability in our democracy," Powell said, but emphasized this "unprecedented action" needs to be understood alongside months of mounting threats and pressure from the administration.
The Fed chair framed the issue starkly: the "threat of criminal charges" is really just a "consequence" of the central bank setting interest rates "based on our best assessment of what will serve the public," rather than bending to the "preferences of the President."
What's ultimately at stake, Powell said, is whether the Federal Reserve can keep making decisions "based on evidence and economic conditions," or whether monetary policy gets driven by "political pressure or intimidation."
Powell wrapped up by reaffirming his commitment to the job. He's served under multiple administrations, and he's not backing down. "I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people," he said.