Federal Reserve Chairman Jerome Powell on Sunday accused President Donald Trump of trying to “manipulate” the Federal Reserve through a criminal perjury investigation.
Republican Florida Rep. Anna Paulina Luna referred Powell to the Justice Department in July, alleging he lied to the Senate Banking Committee about renovations to the Federal Reserve’s Washington headquarters in June. Powell confirmed the probe in a blistering video statement released Sunday night.
“I have deep respect for the rule of law and for accountability in our democracy. No one—certainly not the chair of the Federal Reserve—is above the law. But this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure,” Powell claimed. “This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress’s oversight role; the Fed, through testimony and other public disclosures, made every effort to keep Congress informed about the renovation project. Those are pretexts.”
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“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president,” Powell continued. “This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation.”
Trump and Powell have clashed over the Fed’s resistance to lowering interest rates at a pace desired by the president. Powell also came under fire for his handling of inflation during the Biden administration, initially predicting inflation would be transitory during an August 2021 speech at Jackson Hole, Wyoming, before later admitting inflation ended up being more persistent than he “expected.”
Trump questioned Powell over the renovations during a July 24 tour of the Federal Reserve headquarters project site with Republican South Carolina Sen. Tim Scott, presenting Powell with documents supposedly showing the cost for the project had ballooned to $3.1 billion, a cost overrun of roughly 25%.
“So, we are taking a look, it looks it gets about 3.1 billion, it went up a little bit, or a lot. The 2.7 is now 3.1. It just came out,” Trump said as he pulled out a sheet of paper appearing to list the cost overruns.
“I’m not aware of that, I have not heard that from anybody,” an apparently stunned Powell, after putting on glasses to read the document, responded. He went on to note the $3.1 billion included “the Martin renovation,” completed in 2021, which he described as “a third building” making up the Federal Reserve’s headquarters.
Powell’s term as Fed chair concludes May 2026; he may remain a Fed governor through January 2028.
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