Fed Chair Jerome Powell Under Criminal Investigation, Markets on Alert

Federal Reserve Chair Jerome Powell is under DOJ criminal investigation tied to congressional testimony, raising market volatility and concerns over Fed independence.

U.S. Federal Reserve Chair Jerome Powell disclosed that he is under a criminal investigation by the Department of Justice, an extraordinary development that has sent shockwaves through financial markets and raised urgent questions about the independence of the central bank.

Powell confirmed that federal prosecutors are examining his congressional testimony related to the multi-billion-dollar renovation of the Federal Reserve’s headquarters. The probe reportedly focuses on whether Powell’s statements to lawmakers accurately reflected the scope and cost of the project. No criminal charges have been filed, and the investigation remains ongoing.

In a public statement, Powell strongly denied any wrongdoing, asserting that his testimony was truthful and based on information available at the time. He warned, however, that the investigation comes amid growing political pressure on the Federal Reserve over its interest rate policy, intensifying concerns about potential interference in monetary decision-making.

The revelation marks a historic and unprecedented moment for the U.S. central bank, as no sitting Fed chair has previously faced a criminal investigation. Legal analysts say the case could set a significant precedent, particularly if it escalates or results in formal charges.

Financial markets reacted cautiously following the news, with investors closely watching for signs of instability in U.S. monetary policy. Economists warn that uncertainty surrounding Powell’s leadership could increase volatility and weaken confidence in the Federal Reserve’s independence at a critical moment for the economy.

The White House has denied direct involvement in the investigation, while lawmakers from both parties have called for transparency and restraint. As the DOJ probe continues, the outcome could have lasting implications not only for Jerome Powell’s tenure, but for the future credibility of the Federal Reserve itself.