A message from Jerome Powell

For years, Jerome Powell has handled criticisms from President Trump without escalating tensions. However, everything changed on Sunday when Powell released a strong video statement. He accused the Trump administration of trying to pressure the Federal Reserve into lowering interest rates by threatening legal action against him. He emphasized that such threats challenge the Fed's independence.

Powell’s statement came after the Justice Department sent subpoenas related to his testimony about a renovation project for Fed buildings. He wanted to make sure the public was aware of the pressure he was facing, as it could impact financial markets and people's confidence in the Fed.

Powell, who has hired a top law firm for legal support, stated that he intends to keep doing his job with integrity despite the threats. He believes that the Fed should set interest rates based on the economy, not political pressure from the White House.

Trump has frequently pushed for lower interest rates to promote economic growth, but Powell's approach has often clashed with Trump’s desires. The investigation revolves around claims that Powell might have misled Congress about the costs of the renovation project, but Powell insists the real issue is the administration trying to control the Fed’s decisions.

This situation raises concerns about the independence of the Federal Reserve and what it means for future leadership if Powell were to be replaced. Any new chair would likely face heightened scrutiny and pressure from the administration, potentially impacting their ability to act independently.

The coming weeks will determine how this conflict unfolds, including whether Trump will continue to apply pressure or take more aggressive measures against Powell.

On Friday, the Department of Justice served the Federal Reserve with grand jury subpoenas, threatening a criminal indictment related to my testimony before the Senate Banking Committee last June. That testimony concerned in part a multi-year project to renovate historic Federal Reserve office buildings.

I have deep respect for the rule of law and for accountability in our democracy. No one—certainly not the chair of the Federal Reserve—is above the law. But this unprecedented action should be seen in the broader context of the administration's threats and ongoing pressure.

This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress's oversight role; the Fed through testimony and other public disclosures made every effort to keep Congress informed about the renovation project. Those are 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.

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.

I have served at the Federal Reserve under four administrations, Republicans and Democrats alike. In every case, I have carried out my duties without political fear or favor, focused solely on our mandate of price stability and maximum employment. Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people.

Thank you.

– Jerome Powell