US prosecutors open inquiry threatening criminal indictment against Federal Reserve

US prosecutors have opened an inquiry threatening a 'criminal indictment' against the Federal Reserve, its chairman Jerome Powell revealed Sunday, denouncing new 'threats and ongoing pressure' from the administration of President Donald Trump. Powell said in a video statement that the US central bank received grand jury subpoenas Friday related to his Senate testimony in June concerning a major renovation project of Federal Reserve office buildings. He dismissed the subpoenas as 'pretexts' after months of bitter conflict with Trump, who has publicly excoriated the Fed for not cutting interest rates aggressively to bolster economic growth. 'The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President,' Powell said. He branded the 'unprecedented action' part of the 'administration's threats and ongoing pressure.' Trump said Sunday he had no knowledge of the Justice Department's investigation but told NBC that Powell is 'certainly not very good at the Fed and he's not very good at building buildings.' Investors reacted warily as financial markets opened Monday, with the dollar falling against major currencies along with the 10-year US Treasury bond. Safe-haven assets like gold surged amid the uncertainty. 'The combined drop in the dollar, equities and Treasuries was a reminiscence of the 'sell America' days of last spring,' said Francesco Pesole, strategist at ING in London. 'The downside risks for the dollar from any indications of further determination to interfere with the Fed's independence are substantial.' Senators from both parties blasted the investigation. Republican Thom Tillis said, 'It is now the independence and credibility of the Department of Justice that are in question,' adding he would oppose any Fed nominee confirmation until the matter is resolved. Senate Minority Leader Chuck Schumer called it an assault on the Fed's independence. Powell's term as chairman ends in May, and Trump told Politico last month he would judge Powell's successor on whether they immediately cut rates. The investigation centers partly on cost overruns for renovating the Fed's Washington headquarters, which rose $600 million from the initial $1.9 billion estimate.

SOURCE: https://www.channelstv.com/2026/01/12/us-prosecutors-open-criminal-probe-into-federal-reserve/