Overview
- Jerome Powell disclosed that the Justice Department issued grand‑jury subpoenas and threatened criminal charges in a probe focused on the Federal Reserve’s Washington headquarters renovation.
- Powell characterized the legal steps as “pretexts,” asserting they stem from the Fed setting interest rates independently rather than following President Trump’s preferences.
- Former Fed chairs Ben Bernanke, Alan Greenspan and Janet Yellen issued a joint statement condemning the investigation as an unprecedented effort to undermine central‑bank independence.
- Senior lawmakers from both parties criticized the move, and Republican Sen. Thom Tillis said he will block confirmations of Fed nominees until the matter is resolved.
- Global investors reduced exposure to U.S. assets as the dollar index slipped and Treasury and equity futures fell, with asset managers warning of diversification into hedges such as gold.