Federal Reserve Chair Jerome Powell revealed that the U.S. Department of Justice (DOJ) has served the Federal Reserve with grand jury subpoenas and threatened a possible criminal indictment, drawing sharp criticism and raising alarms about the independence of the U.S. central bank. Powell said the subpoenas relate to his June congressional testimony about a multiyear renovation of the Fed’s headquarters, but described the legal threat as a pretext for political intimidation rather than a bona fide oversight action.
Powell argued the DOJ’s move is tied to growing pressure from the Trump administration, which has repeatedly criticized the Fed for not cutting interest rates as aggressively as it prefers. He stressed that interest-rate decisions must remain rooted in economic evidence and Federal Reserve mandates, not political pressure.
Financial markets reacted nervously to the escalating confrontation. U.S. stocks slipped, the U.S. dollar weakened, and gold surged to record highs, as investors braced for potential volatility and the implications of perceived political interference in monetary policy. Analysts cautioned the clash could undermine confidence in U.S. economic governance and prompt broader market uncertainty if the dispute deepens.news as reported.
