Jerome Powell criminal investigation 2026: Former Fed Chairs Denounce 'Unprecedented' Attack on Independence

The sanctuary of central bank independence is under siege. On January 12, 2026, three former heads of the Federal Reserve—Janet Yellen, Ben Bernanke, and Alan Greenspan—joined seven other economic leaders in a searing condemnation of the Department of Justice’s criminal probe into sitting Chair Jerome Powell. They’ve labeled the investigation an unprecedented attempt to politicize monetary policy, warning it could steer the U.S. toward the economic instability typical of 'banana republics'.

Why the Jerome Powell criminal investigation 2026 is Rocking Washington

The friction between the White House and the Fed reached a boiling point after Jerome Powell revealed he’d been served with subpoenas. The DOJ is reportedly investigating whether Powell misled a Senate committee regarding building renovations. However, the timing is suspicious. President Donald Trump has spent months demanding sharper interest rate cuts, even after the Fed lowered rates three times in 2025 to a range of 3.50% to 3.75%. Powell directly linked the probe to Trump’s frustration over the pace of these cuts.

A 'Chilling' Effect on Markets and Policy

Janet Yellen didn't mince words, calling the probe "extremely chilling." Speaking to CNBC, she argued that the odds of Powell lying are "zero" and suggested the administration is simply trying to force him out before his term ends in May 2026. While the S&P 500 remained flat on Monday, analysts warn that the real damage could be long-term. If the Fed's reputation for impartiality is shattered, it could trigger higher inflation expectations and instability in global markets.