By AFP
January 12, 2026
US Federal Reserve Chair Jerome Powell has avoided confrontation despite President Donald Trump's attacks, but he made a rare forceful response in the face of a criminal investigation - Copyright AFP/File SAUL LOEB
Beiyi SEOW
US Federal Reserve Chair Jerome Powell has generally avoided escalation in the face of Donald Trump’s relentless criticism — but in recent months, the central banker has become a rare figure to publicly resist his attacks.
The change of tack was especially pronounced on Sunday night, when Powell accused the Trump administration of threatening him with prosecution to push the Fed into cutting interest rates. He warned that a new Department of Justice investigation targeting him was a threat to the central bank’s independence.
“What made the statement so powerful is how rare it is,” Jason Furman, a top economic adviser to former US president Barack Obama, told AFP.
“A year ago, Powell got a question about Donald Trump and the Fed, and gave a one-word answer,” added Furman, now a professor at Harvard University. “He has not wanted to be baited into a fight.”
The fact that Powell felt the need to respond forcefully now “conveys just how serious the issue is,” Furman said.
Powell, a 72-year-old former investment banker, took the helm at the Fed in 2018 after he was tapped by Trump to replace Janet Yellen. It was Trump’s first presidency.
Powell then withstood months of withering attacks from Trump for raising interest rates.
When Covid-19 took hold in 2020, the Fed rapidly slashed its benchmark rate to zero and rolled out new support measures, moves that helped to prevent a more severe downturn.
His tenure won him praise and criticism from all sides as he maintained the central bank’s independence.
Over that tumultuous period, Powell, who is also called “Jay,” managed to forge consensus among the diverse members of the Fed’s rate-setting committee.
In 2021, the wealthy Republican with no formal economics training was nominated by Democratic President Joe Biden to lead the Fed for a second term.
He proceeded to oversee a series of sharp rate hikes in 2022 to curb surging inflation after the pandemic, before beginning to cautiously lower rates again in 2024 and 2025 as he eyed the price effects from Trump’s sweeping new tariffs.
– ‘The guy who stood up’ –
Less than a year before his time as Fed chair expires in May 2026, however, Powell has again come under fire as Trump lashes out at him for not lowering interest rates more aggressively.
Trump, now in his second presidency, has called Powell a “numbskull” and “moron,” and in July went so far as to suggest he could be dismissed for “fraud” over the handling of a $2.5 billion renovation project at the Fed’s headquarters.
Since Trump returned to the White House, Powell has proven willing to compromise in certain areas, such as by pulling back on the Fed’s work on climate change.
But “Trump pushed him too far this time, and he came out with all guns blazing,” Brookings senior fellow David Wessel said of the Fed chief’s sharp rebuke of the Justice Department probe.
Wessel expects the forceful response will cement Powell’s legacy as “a Fed chair with a spine.”
“He will be seen as the guy who stood up for the independence of the Fed, and the rule of law,” Wessel told AFP.
Already, Powell made headlines when he appeared with Trump in July as the president toured the under-renovation Fed buildings while criticizing cost overruns.
In a brief exchange in front of reporters, Powell corrected Trump in real-time as the president claimed the price tag for the revamp had ballooned to $3.1 billion.
The usually stoic Fed chair was seen shaking his head on camera while Trump spoke, and responding: “I haven’t heard that from anybody.”
Prior to his appointment to the central bank in 2012 by then-president Obama, Powell was a scholar at the Bipartisan Policy Center think tank.
The native of Washington served in the Treasury Department, in charge of financial institutions, for a brief period under Republican President George H.W. Bush.
Powell says Federal Reserve subpoenaed by US Justice Department
By AFP
January 11, 2026
The US president has criticized Fed Chair Jerome Powell for cost overruns for renovation of the Fed's Washington headquarters - Copyright AFP ANDREW CABALLERO-REYNOLDS
Federal Reserve Chairman Jerome Powell said Sunday that the central bank had been subpoenaed by the US Justice Department, blasting the move as part of President Donald Trump’s extraordinary pressure campaign on US monetary policy decisions.
Powell added in a statement that the bank received grand jury subpoenas “threatening a criminal indictment” on Friday related to his Senate testimony in June, which had been about a major renovation project of Federal Reserve office buildings.
He dismissed the possible threat of indictment over his testimony or the renovation project as “pretexts.”
“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.
“This unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure,” Powell said.
The Fed has a dual mandate to keep prices stable and unemployment low, and its main tool in doing so is by setting a key interest rate that influences the cost of borrowing across the economy.
Trump has consistently pressured Powell and the central bank to move faster in lowering interest rates, in a breach of the long-standing independence of the institution.
Trump on Sunday denied any knowledge of the Justice Department’s investigation into the Federal Reserve.
“I don’t know anything about it, but he’s certainly not very good at the Fed, and he’s not very good at building buildings,” NBC quoted Trump as saying.
– ‘Corrupt takeover’ –
Senators from both sides of the aisle blasted the investigation.
“It is now the independence and credibility of the Department of Justice that are in question,” Republican Thom Tillis said.
“I will oppose the confirmation of any nominee for the Fed — including the upcoming Fed Chair vacancy — until this legal matter is fully resolved,” he added.
Democrat Elizabeth Warren accused Trump of trying “to complete his corrupt takeover” of the central bank by pushing Powell out and installing a “sock puppet” instead.
Powell’s term as chairman of the Federal Reserve ends in May, and Trump told Politico in an interview last month that he would judge Powell’s successor on whether they immediately cut rates.
The US president has openly spoken about ousting Powell but stopped short of doing so, and focused instead on cost overruns for renovation of the Fed’s Washington headquarters.
In July, the cost of the Fed’s facelift of its 88-year-old Washington headquarters and a neighboring building were up by $600 million from an initial $1.9 billion estimate.
That month, Trump made an unusual visit to the construction site during which the two men, clad in hard hats, bickered over the price tag for the makeover.
A significant driver of the cost is security, including blast-resistant windows and measures to prevent the building from collapsing in the event of an explosion.
The Federal Reserve, the world’s most important central bank, makes independent monetary policy decisions and its board members typically serve under both Republican and Democratic presidents.
By AFP
January 11, 2026
The US president has criticized Fed Chair Jerome Powell for cost overruns for renovation of the Fed's Washington headquarters - Copyright AFP ANDREW CABALLERO-REYNOLDS
Federal Reserve Chairman Jerome Powell said Sunday that the central bank had been subpoenaed by the US Justice Department, blasting the move as part of President Donald Trump’s extraordinary pressure campaign on US monetary policy decisions.
Powell added in a statement that the bank received grand jury subpoenas “threatening a criminal indictment” on Friday related to his Senate testimony in June, which had been about a major renovation project of Federal Reserve office buildings.
He dismissed the possible threat of indictment over his testimony or the renovation project as “pretexts.”
“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.
“This unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure,” Powell said.
The Fed has a dual mandate to keep prices stable and unemployment low, and its main tool in doing so is by setting a key interest rate that influences the cost of borrowing across the economy.
Trump has consistently pressured Powell and the central bank to move faster in lowering interest rates, in a breach of the long-standing independence of the institution.
Trump on Sunday denied any knowledge of the Justice Department’s investigation into the Federal Reserve.
“I don’t know anything about it, but he’s certainly not very good at the Fed, and he’s not very good at building buildings,” NBC quoted Trump as saying.
– ‘Corrupt takeover’ –
Senators from both sides of the aisle blasted the investigation.
“It is now the independence and credibility of the Department of Justice that are in question,” Republican Thom Tillis said.
“I will oppose the confirmation of any nominee for the Fed — including the upcoming Fed Chair vacancy — until this legal matter is fully resolved,” he added.
Democrat Elizabeth Warren accused Trump of trying “to complete his corrupt takeover” of the central bank by pushing Powell out and installing a “sock puppet” instead.
Powell’s term as chairman of the Federal Reserve ends in May, and Trump told Politico in an interview last month that he would judge Powell’s successor on whether they immediately cut rates.
The US president has openly spoken about ousting Powell but stopped short of doing so, and focused instead on cost overruns for renovation of the Fed’s Washington headquarters.
In July, the cost of the Fed’s facelift of its 88-year-old Washington headquarters and a neighboring building were up by $600 million from an initial $1.9 billion estimate.
That month, Trump made an unusual visit to the construction site during which the two men, clad in hard hats, bickered over the price tag for the makeover.
A significant driver of the cost is security, including blast-resistant windows and measures to prevent the building from collapsing in the event of an explosion.
The Federal Reserve, the world’s most important central bank, makes independent monetary policy decisions and its board members typically serve under both Republican and Democratic presidents.
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