The Fed Jerome Powell Investigation centers on grand jury subpoenas the Department of Justice served related to Powell’s testimony before the Senate Banking Committee, the chair said in a video statement released by the Federal Reserve.
Powell said the subpoenas threaten a criminal indictment tied to his June testimony about a multi year renovation of Federal Reserve office buildings, and he urged respect for the rule of law and accountability, according to his video statement.
The Federal Reserve has not yet complied with the subpoenas, a person familiar with the situation told CNBC, and the probe is ongoing, the same network reported. CNBC said the investigation is being conducted by the office of Jeanine Pirro, the U.S. Attorney for the District of Columbia.
CNBC also reported it was not clear when the deadline for turning over documents demanded by the subpoenas would fall, and that Powell told reporters, "I have nothing for you on that today," when asked about a Fed response.
In his video message Powell described the subpoenas as pretexts and said the threat of criminal charges followed the Fed’s decision to set interest rates based on its economic assessment rather than following the President’s preferences, the Federal Reserve said.
Political Context And Reactions
News coverage described a wider political backdrop in which President Trump has publicly pressured the Fed to lower interest rates, according to reporting by The New York Times. The Times said Powell has been subjected to name calling and other pressure intended to force down rates.
The New York Times reported that Powell has faced multiple political challenges recently, including attendance at a Supreme Court hearing about a fellow Fed governor whom the President sought to remove on fraud charges that the Times said were never filed or prosecuted.
The Times also said the political atmosphere made the Fed chair unusually cautious and that Powell advised the next Fed leader to "Stay out of elected politics. Don't get pulled into elected politics. Don't do it," remarks he made at a news conference, according to the Times.
Together the reported probe and the public pressure form the immediate context for the Fed’s work, the reporting shows, leaving open how the subpoenas and political friction will affect the central bank’s future policy decisions.
