WASHINGTON — The chair of the Federal Reserve issued a rare public statement Sunday, accusing the Justice Department of using the threat of criminal prosecution to pressure the central bank over its interest-rate decisions.
In the statement, Chair Jerome Powell said the Department of Justice served the Fed with grand jury subpoenas Friday, raising the prospect of a criminal indictment tied to his testimony before the Senate Banking Committee last June. That testimony addressed, in part, a multiyear renovation project involving historic Federal Reserve office buildings.
Powell said he respects the rule of law and congressional oversight but described the subpoenas as “unprecedented” and part of a broader pattern of pressure from the administration. He asserted that the investigation was not genuinely about his testimony or the renovation project, noting that the Fed had made repeated efforts to keep Congress informed through public disclosures and testimony.
Instead, Powell argued, the threat of criminal charges stemmed from the central bank’s refusal to align monetary policy with the president’s preferences. He framed the dispute as a test of whether the Fed can continue setting interest rates based on economic evidence and conditions, or whether policy decisions will be shaped by political intimidation.
Powell said he has served under four administrations of both parties and has carried out his responsibilities without political influence, focusing on the Fed’s dual mandate of price stability and maximum employment. He said he intends to continue serving with integrity and independence, emphasizing that public service sometimes requires standing firm in the face of pressure.
