Jerome Powell DOJ Investigation 2026: The Fight for Fed Independence
Federal Reserve Chair Jerome Powell faces a DOJ criminal investigation over renovation costs in 2026. President Trump denies involvement, but critics call it a 'pretext' to oust the chair.
The long-standing tension between the White House and the central bank has finally reached a breaking point. Federal Reserve Chair Jerome Powell revealed on January 11 that he's under criminal investigation by the federal government. While President Donald Trump claims he doesn't know anything about it, the move is widely seen as an unprecedented escalation of his campaign to oust the central bank chief.
Understanding the Jerome Powell DOJ Investigation 2026
The investigation, reportedly approved in November by U.S. Attorney Jeanine Pirro, focuses on the Federal Reserve's headquarters renovation. The project's cost has ballooned to $2.5 billion, roughly $600 million over the original budget. Prosecutors allege that Powell misled Congress regarding these costs, which increased due to design changes and unexpected asbestos removal.
Political Pressure or Legal Accountability?
Legal experts and political opponents argue the renovation probe is merely a 'pretext.' Throughout 2025, President Trump unleashed a barrage of insults, calling Powell a "stubborn moron" and "incompetent." On December 29, Trump hinted at legal action for "gross negligence," a claim that could satisfy the narrow grounds needed to fire a Fed chair 'for cause.'
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.
Resistance is forming even within the Republican Party. Senator Thom Tillis has vowed to oppose any future Fed nominees if the investigation is found to be politically motivated. With a slim 13-11 majority in the Banking Committee, Trump's path to replacing Powell remains fraught with political risk.
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