Business & Economics
Trump DOJ Issues Grand Jury Subpoenas to Fed Chair Powell Over Renovation Testimony
On 9 Jan 2026 the Justice Department served Jerome Powell with grand-jury subpoenas, threatening indictment over his June 2025 Senate remarks on a $2.5 billion Fed headquarters renovation, a first-ever criminal probe of a sitting Fed chair that escalates White House pressure for faster rate cuts.
Focusing Facts
- Subpoenas were physically delivered to the Federal Reserve on Friday, 9 January 2026, demanding documents tied to Powell’s 20 June 2025 testimony.
- The federal funds rate stands at 3.50 %–3.75 % after a 25-bp cut in December 2025, with the next FOMC decision scheduled for 28 January 2026.
- Powell’s term as chair ends in May 2026, but his Board seat runs until 2028, allowing him to remain even if he relinquishes the gavel.
Context
U.S. presidents have leaned on the Fed before—Richard Nixon infamously pressed Arthur Burns ahead of the 1972 election—but no administration has deployed criminal subpoenas against a chair since Andrew Jackson weaponised the Treasury in 1833 to dismantle the Second Bank. The episode underscores a global, decades-long drift toward executive encroachment on nominally independent monetary authorities, from Erdogan’s Turkey to Modi’s India, now reaching the world’s reserve-currency issuer. Whether the gambit succeeds matters far beyond today’s market jitters: credibility won by the 1951 Treasury-Fed Accord and 1980s Volcker disinflation underpins the dollar’s hegemonic status. If that firewall erodes, future Congresses—or creditors—could rewrite the last century’s assumption that U.S. debt is backed by apolitical monetary stewardship.
Perspectives
Public service and international media
RNZ, France 24 — They frame the subpoenas as an unprecedented political assault on the Federal Reserve that shows Trump trying to bully an independent institution. Coverage stresses democratic peril and Trump’s authoritarian impulses, largely accepting Powell’s narrative at face value and giving scant scrutiny to the renovation’s cost overruns or legal merits.
Market-focused financial press
American Banker, Profit by Pakistan Today — They concentrate on what the DOJ move means for interest-rate policy and immediate market reaction, warning investors about volatility and central-bank independence. By viewing the confrontation mainly through the lens of market risk they underplay the constitutional and legal stakes, fitting events neatly into a ‘rates and risk assets’ narrative.
Crypto-oriented outlets
cryptonews.com, Decrypt, Crypto Briefing — They treat the subpoenas as a macro shock that could push traders toward Bitcoin and other crypto assets, spotlighting Powell’s independence fight as fuel for alternative currencies. Stories tie nearly any political turmoil to bullish crypto theses, potentially overstating the event’s direct benefit for Bitcoin while glossing over broader financial-system consequences.