TLDR:
- Powell received subpoenas from the Justice Department threatening him with impeachment over Senate testimony in June about building renovations.
- Fed Chairman Says Real Problem Is That Central Bank Sets Rates Based on Economy, Not White House Preferences
- Powell served in four administrations and vows to continue his duties despite unprecedented legal pressure.
- Subpoenas test whether Fed maintains evidence-based policy or succumbs to political intimidation
Federal Reserve Chairman Jerome Powell announced that the Justice Department issued grand jury subpoenas threatening criminal charges over his Senate testimony in June about building renovations.
Powell characterized the action as retaliation for the Federal Reserve’s independent decisions on interest rates, rather than genuine concerns about his testimony before Congress.
The subpoenas mark an unprecedented escalation in tensions between the central bank and the current administration over control of monetary policy.
Justice Department Action Follows Senate Banking Committee Testimony
The Justice Department served the Federal Reserve with subpoenas related to Powell’s appearance before the Senate Banking Committee last June.
His testimony addressed a multi-year renovation project for historic Federal Reserve office buildings. Powell stated that the Federal Reserve maintained transparency with Congress throughout the renewal process through testimony and public disclosures.
“I have deep respect for the rule of law and for accountability in our democracy,” Powell said. He acknowledged that no official, including the chairman of the Federal Reserve, is above legal scrutiny.
However, Powell framed the Justice Department’s action within a pattern of administrative pressure on the institution.
Powell dismissed the justifications put forward for the subpoenas as pretexts. “This new threat has nothing to do with my testimony last June or the renovation of the Federal Reserve buildings,” he explained.
The president argued that the criminal threat arises from the Federal Reserve setting interest rates based on economic evaluations rather than presidential preferences.
Powell vows to continue Senate-confirmed role
The chairman of the Federal Reserve has served under four presidential administrations of both political parties. “In each case, I have carried out my duties without fear or political favor, focusing solely on our mandate of price stability and maximum employment,” Powell said. His focus has remained exclusively on the dual mandate of the Federal Reserve.
Powell described that public service sometimes requires resilience against threats and intimidation. “It’s about whether the Federal Reserve will be able to continue setting interest rates based on evidence and economic conditions,” he said.
The president questioned whether monetary policy will follow data-driven analysis or political pressure.
Despite the unprecedented nature of the Justice Department’s action, Powell pledged to continue his Senate-confirmed responsibilities. “I will continue to do the job the Senate confirmed me to do, with integrity and commitment to serving the American people,” he said.
The president’s statement represents a direct public challenge to what he characterized as the administration’s attempts to influence monetary policy through legal threats.
