Trump’s Justice Department has launched an unprecedented criminal probe against Federal Reserve Chair Jerome Powell, sparking fierce condemnation from former Fed chairs who warn this attack threatens America’s economic foundation.
Story Highlights
- DOJ issued subpoenas threatening criminal indictment against Fed Chair Powell over building renovation testimony
- Former Fed chairs Greenspan, Bernanke, and Yellen condemn probe as “prosecutorial attacks” with no precedent
- Powell calls subpoenas a pretext to force interest rate cuts, vows to resist political pressure
- Stock markets declined as bipartisan lawmakers express concern over Fed independence threats
Trump Administration Escalates Pressure Campaign Against Powell
The Department of Justice served subpoenas to Federal Reserve Chair Jerome Powell regarding his June 2025 Senate testimony about a $2.5 billion Fed building renovation project. Powell disclosed the subpoenas in a Sunday night video statement, describing them as a transparent attempt to coerce the Fed into slashing interest rates.
This marks an unprecedented escalation from Trump’s year-long public criticism of Powell, moving from rhetorical attacks to potential criminal charges over what amounts to administrative testimony about construction costs.
Greenspan, Bernanke, Yellen and other past officials say Trump using 'prosecutorial attacks' to undermine Fed https://t.co/yADzRLwCWj
— CNBC (@CNBC) January 12, 2026
Former Fed Leaders Unite Against Institutional Attack
Three former Federal Reserve chairs—Alan Greenspan, Ben Bernanke, and Janet Yellen—joined forces with ex-Treasury Secretaries Henry Paulson, Robert Rubin, Timothy Geithner, and Jacob Lew to condemn the probe.
Their joint statement on Substack called the actions “prosecutorial attacks” that have “no place in the United States,” warning of “highly negative consequences for inflation” similar to weak emerging-market institutions.
This bipartisan coalition of economic leaders represents decades of expertise defending the Fed’s independence from political interference, a principle fundamental to America’s economic stability.
Powell Stands Firm Against Political Coercion
In his video statement, Powell emphasized he has acted without “political fear or favor” throughout his tenure and characterized the subpoenas as a pretext to force rate cuts. The Fed chair has maintained elevated interest rates citing persistent inflation risks from tariff policies, directly conflicting with Trump’s demands for lower rates.
Powell’s term as chair ends in May, but his governor position extends until 2028, creating a potential standoff if he remains on the board despite political pressure.
Even Republican Senator Kevin Cramer of North Dakota, typically supportive of Trump, called for a quick resolution to the probe, stating Powell is “not a criminal.”
The bipartisan concern reflects recognition that Fed independence serves conservative principles of sound money and economic stability. Stock markets declined Monday following news of the confrontation, demonstrating investor anxiety over potential politicization of monetary policy.
Dangerous Precedent Threatens Constitutional Order
This criminal probe represents an assault on institutional independence that conservatives should recognize as government overreach. The Federal Reserve’s autonomy from political pressure has been crucial for maintaining price stability and preventing the kind of runaway inflation that devastates working families.
Trump’s use of DOJ powers to intimidate a Fed chair over minor administrative matters sets a dangerous precedent that future Democrat presidents could exploit to manipulate monetary policy for partisan gain, undermining the constitutional separation of powers that protects American economic interests.
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Trump’s legal attack on Powell underscores his aim for full control of Fed
