News|Donald TrumpInvestigation of Fed chief Jerome Powell: What Trump has said about himJustice Department probes Fed Chair Jerome Powell as tensions with President Trump over interest rates continue.
On Thu, Jan 11, 2026, Federal Reserve Board Chair Jerome Powell announced that he is under investigation by the federal government. The Department of Justice, approved by United States Attorney for the District of Columbia Jeanine Pirro, is leading the…
On Thu, Jan 11, 2026, Federal Reserve Board Chair Jerome Powell announced that he is under investigation by the federal government. The Department of Justice, approved by United States Attorney for the District of Columbia Jeanine Pirro, is leading the investigation.
The investigation centers on Powell's management of the Federal Reserve's headquarters renovation. Accusations involve misleading Congress about the project's cost, which has risen to $2.5 billion, exceeding the initial budget by approximately $600 million due to design changes, increased costs, and unexpected asbestos removal.
This investigation is a significant development in the ongoing tensions between Powell and President Donald Trump, who has expressed dissatisfaction with Powell's cautious approach to lowering interest rates. Recent reductions have been gradual, with three cuts in the previous year.
Concerns have arisen regarding the potential impact of these tensions on the Federal Reserve's independence and the broader U.S. economy. The upcoming Federal Reserve meeting on Jan 27-28, 2026, will be closely monitored.
On Dec 29, 2025, Trump mentioned the possibility of pursuing a "gross incompetence lawsuit" against Powell, suggesting legal actions could be taken depending on the investigation's outcomes. The Justice Department has not yet commented on the investigation.
On Thu, Jan 11, 2026, Federal Reserve Board Chair Jerome Powell announced that he is under investigation by the federal government.
Powell's term as chair concludes in May 2026, but he may remain a Fed governor until Jan 2028. In a statement, Powell emphasized the importance of judicial processes, describing the ongoing actions as "unprecedented." The White House has not issued a comment on the matter.
There have been discussions about the potential removal of Powell, which the President can pursue "for cause," referring to inefficiency, neglect, or malfeasance, according to a Supreme Court decision. Legal and political considerations will influence any such actions, with notable opposition from within Trump's own party.
Senator Thom Tillis has called for a review of the Justice Department's actions and has expressed hesitation in supporting future Fed nominees by Trump. The political dynamics within the Banking Committee, which oversees the Fed, will play a crucial role in these developments.
Apr 17, 2025: Trump criticized Powell's leadership. Jun 18, 2025: Trump expressed dissatisfaction with Powell's decisions. Jul 13, 2025: Trump stated his belief that Powell's leadership was detrimental. Jul 15, 2025: Trump criticized Powell's intelligence and leadership style. Jul 22, 2025: Trump remarked on Powell's competence. Aug 1, 2025: Trump called Powell "stubborn" during public statements. Aug 13, 2025, and Sep 20, 2025: Trump labeled Powell as "incompetent." Nov 18, 2025, and Dec 9, 2025: Trump described Powell as "not a smart guy."
The developments surrounding Powell's investigation and the ongoing tensions with the administration continue to be a focal point in U.S. economic policy discussions.
Based on reporting by Al Jazeera.