In a move to defuse a growing political storm, the US Attorney for the District of Columbia, Jeanine Pirro, has publicly sought to soften the perception of her office's criminal investigation into Federal Reserve Chair Jerome Powell. The probe, which became public over the weekend of 11-12 January 2026, has alarmed senators and economists, who see it as an escalation of political pressure on the independent central bank.
Subpoenas Issued After Fed 'Ignored' Requests
Taking to the social media platform X late on Monday 12 January 2026, the former Fox News presenter stated that her office had first requested information from the Federal Reserve regarding a long-running, multi-billion dollar renovation of its headquarters. She claimed these requests "were ignored, necessitating the use of legal process" in the form of grand jury subpoenas.
Pirro was keen to distance the investigation from any direct threat to indict Powell. "The word 'indictment' has come out of Mr. Powell's mouth, no one else's," she wrote. She emphasised that her office makes decisions "based on the merits" and expects the Fed Chairman's "full cooperation," adding that they agree with his stated principle that "no one is above the law."
The subpoenas specifically seek Powell's testimony from June 2025 before the Senate Banking Committee, where he was questioned about the controversial renovation project.
Trump's Long-Running Campaign Against the Fed
The investigation is the latest salvo in a year-long campaign by President Donald Trump to exert pressure on the central bank. Trump has repeatedly criticised Powell for not cutting interest rates aggressively enough to stimulate the economy, frequently assailing him as "too late" and threatening to fire him.
The $2.5 billion headquarters renovation has become a focal point for this pressure. In July 2025, Trump slammed cost overruns, which the Fed puts at $60 million, as "really disgraceful." The Fed attributes the extra expenses to inflation and unexpected, costly asbestos abatement work.
Speaking to reporters on Tuesday 13 January 2026, Trump again tied the renovation to Powell's competence, stating the project was "billions of dollars over budget" and calling the economist "either ... incompetent or ... crooked." He also claimed recent inflation data justified the Fed cutting the overnight lending rate to stimulate bank lending and lower mortgage and credit card rates.
Powell Warns of Political Intimidation
In an unprecedented videotaped statement, Chair Powell confirmed the investigation but insisted it was not about his congressional testimony or the renovation specifics. He framed it as a fundamental challenge to the Fed's independence.
"This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions -- or whether instead monetary policy will be directed by political pressure or intimidation," Powell stated.
His stark warning underscores the fears of many observers that the probe represents an attempt by the Trump administration to bully the Federal Reserve's board into adopting a more dovish monetary policy, compromising its traditional political independence which is designed to ensure long-term economic stability.
