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US Attorney Jeanine Pirro defends Fed investigation after Powell claims
Federal Reserve Chairman Jerome Powell confirmed the central bank had been served by the Justice Department in connection with allegations related to congressional testimony on the renovation of the bank’s headquarters. (Credit: Federal Reserve)
U.S. Attorney for the District of Columbia Jeanine Pirro said on Monday the Federal Reserve repeatedly failed to respond to outreach from her office regarding alleged cost overruns and Chairman Jerome Powell’s congressional testimony, prompting prosecutors to initiate a legal process that she said “is not a threat.”
“The word ‘indictment’ has come out of Mr. Powell’s mouth, no one else’s. None of this would have happened if they had just responded to our outreach,” Pirro said.
“This office makes decisions based on the merits, nothing more and nothing less. We agree with the chairman of the Federal Reserve that no one is above the law, and that is why we expect his full cooperation.”
A person familiar with the situation told Fox News Digital that the Federal Reserve received two emails over the winter holidays that conveyed no sense of urgency and made no mention of a criminal investigation, before it received a subpoena.
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Federal Reserve Chair Jerome Powell arrives at the U.S. Federal Reserve in Washington on Jan. 13, 2026. (Nathan Howard/Reuters / Reuters)
In a video statement released Sunday, Powell said the Justice Department served the Federal Reserve with grand jury subpoenas on Friday, describing the move as a threat of criminal indictment related to his June testimony before the Senate Banking Committee.
The testimony focused in part on a multi-year, $2.5 billion project to renovate two Federal Reserve office buildings: the Marriner S. Eccles Federal Reserve Board Building and the 1951 Constitution Avenue Building.
Powell said the Justice Department’s “new threat” was a “pretext” unrelated to his Senate testimony or the renovation project.
“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,” he said. “This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation.”
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A worker enters the construction site of the Federal Reserve headquarters in Washington, D.C., on Jan. 12, 2026. (Kevin Lamarque/Reuters / Reuters)
Powell has resisted repeated calls from President Donald Trump to cut interest rates more aggressively, though the Federal Reserve lowered rates three times in late 2025.
Rep. Anna Paulina Luna, R-Fla., referred Powell to the Justice Department in July, alleging in a letter to Attorney General Pam Bondi, that he misrepresented the scope and features of the Federal Reserve’s renovation project and made false statements to officials about its escalating price tag.
She said the renovation costs were $700 million over budget.
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The Federal Reserve said on its website that cost increases were driven by design changes following consultations with review agencies, higher-than-expected materials and labor costs, and unforeseen conditions such as additional asbestos and toxic soil contamination.
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Several Republican lawmakers, including Sens. Thom Tillis of North Carolina and Lisa Murkowski of Alaska, questioned the Justice Department’s motive for issuing grand jury subpoenas to the Federal Reserve, raising concerns that the action could undermine the central bank’s independence.
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“If there were any remaining doubt whether advisors within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none. It is now the independence and credibility of the Department of Justice that are in question,” Tillis said.
He added that he would oppose the confirmation of any nominee for the Fed, including the upcoming Federal Reserve chair vacancy, until the legal matter is “fully resolved.”
