The US Department of Justice has opened a criminal investigation against Fed Chairman Jerome Powell. He defends himself against the attack on the independence of the central bank.
01/12/2026, 04:5701/12/2026, 04:57
Renzo Ruf, Washington / ch media
This has never happened before in the 112-year history of the American Federal Reserve: The Justice Department has begun a criminal investigation against the Fed chief. This investigation is allegedly related to Jerome Powell’s appearance before a Senate committee last June, as he himself announced on Sunday. He is said to have knowingly told untruths about the cost explosion in the renovation of the Fed headquarters in Washington, which has been sharply criticized by the White House for months.
Jerome Powell has not yet allowed himself to be influenced by Donald Trump’s wishes.Image: keystone
However, Powell rejected this accusation in a video message. He called the official justification for the investigation, approved by Justice Department prosecutor Jeanine Pirro, a pretext. President Donald Trump is more interested in putting “pressure” on the politically independent central bank – because Trump has long been of the opinion that the Federal Reserve needs to lower the key interest rate more aggressively.
However, a majority of the central bank’s monetary policy committee, which has been chaired by Powell for almost eight years, has stubbornly refused to give in to this pressure in recent months. The Fed chief said that the practice of setting interest rates “based on our best estimates” at a level “that serves the public” is sticking to the practice instead of following the president’s preferences.
Powell’s term expires in May
What is particularly surprising about the escalation in the power struggle over the Federal Reserve is the timing. Powell’s term as Fed chair expires in May; Trump recently announced that he would soon announce the name of his successor. This then still has to be confirmed by the Senate.
So the president could have simply waited until Powell announced his resignation or at least retreated to the second line. (Theoretically, he could continue to work as a rank-and-file member of the Fed’s governing body until January 2028. But that is considered unlikely.)
With the intervention of the Justice Department, Trump is now throwing the gauntlet to the Fed chief. The president had already tried to fire Fed Governor Lisa Cook last year; She defended herself against this unusual step using legal means. The Supreme Court, the highest court in the country, will hear the matter later this month.
The Renovation of the Fed headquarters near the White House began four years ago; The (generous) budget has reportedly already been exceeded by $700 million. Trump has therefore repeatedly accused the Fed chief of waste and incompetence in recent months. The president also insulted the Fed chief – whom he himself had nominated during his first term in office – in increasingly foul language.
Powell denied these allegations. He said the additional costs could be justified by the complex renovation work. And he always informed Congress, which oversees the work of the Federal Reserve. (aargauerzeitung.ch)