Legal Shockwave: Trump Administration’s Indictment Threat Intensifies Standoff With Fed Chair Powell

                                            Federal Reserve Chair Jerome Powell

A dramatic new chapter has opened in the long‑running conflict between President Donald Trump and Federal Reserve Chair Jerome Powell. Powell disclosed that the Department of Justice issued grand jury subpoenas to the Federal Reserve and warned him of a potential criminal indictment tied to his testimony before the Senate Banking Committee last June.

The testimony in question involved a US$2.5 billion renovation project for Federal Reserve office buildings—an initiative the Trump administration has repeatedly criticized as excessive. Powell described the legal move as a pretext aimed at pressuring the central bank to cut interest rates more aggressively, a demand Trump has made for years.

The threat marks an unprecedented escalation in tensions between the White House and the traditionally independent Federal Reserve. Analysts warn that political interference—real or perceived—could raise borrowing costs and undermine confidence in U.S. economic governance.

Powell emphasized his respect for the rule of law but cautioned that such actions could jeopardize the Fed’s ability to operate free from political influence. Meanwhile, some lawmakers, including Republican Senator Thom Tillis, expressed concern that the Justice Department’s actions risk damaging its credibility and independence.

As the standoff deepens, the situation raises profound questions about the boundaries of executive power, the autonomy of the central bank, and the stability of U.S. financial institutions.