Overview
- The Justice Department served grand jury subpoenas to the Federal Reserve seeking records tied to Jerome Powell’s June testimony about a $2.5 billion headquarters renovation, and Powell vowed to continue his duties.
- Trump escalated attacks by calling Powell incompetent or crooked, rejected Jamie Dimon’s warning about endangering Fed autonomy, and said he will press ahead with naming a replacement within weeks.
- U.S. Attorney Jeanine Pirro said the Fed ignored repeated outreach and defended using legal process, and reporting indicates she issued subpoenas without notifying Treasury, the White House or DOJ leadership.
- Former Fed chairs and global central bankers issued rare statements backing Powell and warning against eroding central bank independence, as business leaders cautioned that politicizing the Fed could lift inflation expectations and borrowing costs.
- Political fallout widened as Republican senators, including Thom Tillis, pledged to block Fed nominees until the probe is resolved, while markets showed a muted immediate reaction with major indexes closing higher.