Fed’s Powell under criminal investigation over headquarters renovation

The U.S. Attorney’s Office for the District of Columbia has opened a criminal investigation against Federal Reserve Chairman Jerome Powell over the renovation of the central bank’s headquarters in Washington and the truthfulness of his testimony to Congress on the project.

Officials told The New York Times, which first reported the investigation, that it focuses on whether Powell accurately characterized the scope and cost of the renovation during his congressional appearances.

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Powell confirmed that the Federal Reserve had been served. He said he respected the rule of law and congressional oversight, but called the Justice Department’s decision “unprecedented” and politically motivated.

“This new threat is not about my testimony last June or the renovation of the Federal Reserve buildings,” Powell said in a video statement Sunday evening.

“The threat of criminal prosecution 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 president’s preferences,” he added.

The White House did not immediately respond to Fox News Digital’s request for comment.

Tensions between the president Donald Trump and Powell stewed over central bank decisions on interest rates and more broadly. monetary policies. Trump called on the Fed to cut rates, which he said could save the nation “hundreds of billions of dollars.”

Powell kept the benchmark rate between 4.25% and 4.5% as the Fed took a wait-and-see approach to assessing the impact of Trump’s sweeping tariffs. While the central bank has since lowered rates, Trump’s attacks on Powell, whom he appointed in 2017, have increasingly taken on a personal tone, including the use of derisive nicknames.

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This strained relationship increasingly extends beyond monetary policy.

The renovation of the The Federal Reserve two major office buildings in Washington’s Foggy Bottom neighborhood are valued at $2.5 billion and are financed by the central bank itself, not taxpayers.

The Fed is self-funding and does not rely on Congressional appropriations to cover its operating expenses, which include employee salaries, facility maintenance and ongoing renovations. Its main revenues come from interest earned on government securities and fees charged to financial institutions.

In June 2025, Powell told members of the Senate Banking Committee: “There is no new marble. There are no special elevators.

Powell also told lawmakers that no one “wants to do a major renovation of a historic building while in office.”

“We decided to do it because, honestly, when I was administrative governor, before I became president, I realized how much the Eccles Building really needed a serious renovation,” Powell said, adding that the building was “not really safe” and was not watertight.

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He also said the cost overruns are due, in part, to unexpected construction issues and the country’s inflation rate.

The project is expected to be completed in fall 2027, and Washington-based employees are expected to begin working in the building in March 2028.

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Trump has previously threatened legal action over the renovations and mocked the cost and design of the project.

“They’re building a basement in the Potomac River. I could have told them it’s very difficult to do, it doesn’t work and it’s very expensive,” Trump said. “But they are worth up to $4 billion, led by this clown,” he added. in Novemberreferring to Powell.

The project is expected to be completed in fall 2027, and Washington-based employees are expected to begin occupying the building in March 2028.