Powell Discloses DOJ Subpoenas, Escalating Clash Over Fed Independence

Overview

• The Federal Reserve said it received grand-jury subpoenas threatening criminal charges related to Jerome Powell’s June Senate testimony on the renovation, which he called a politically motivated pretext to influence interest-rate decisions.
• The Justice Department declined to comment and the White House said President Trump did not order an investigation, while Trump told NBC News he was unaware of the move and criticized Powell.
• Reporting says the D.C. U.S. Attorney’s Office opened a criminal inquiry reviewing Powell’s statements and spending records, with approval last November by U.S. Attorney Jeanine Pirro.
• Senate Banking Committee member Thom Tillis vowed to oppose confirmation of any Trump Fed nominees until the legal issue is resolved, setting up a nomination fight as Powell’s chair term ends in May.
• A joint statement by former Fed chairs and ex–Treasury secretaries warned the probe aims to undermine the central bank’s independence, and markets weakened the dollar, sent gold to record highs and pressured U.S. equities.